REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of this 30th day of August, 2005, by and between EAGLE LAKE
INCORPORATED, a Nevada corporation (the "Company"), and [see schedule] (a
"Holder").
PREMISES
This Agreement shall govern the rights of the Holder respecting the
registration under the Securities Act of the resale of securities owned by
Holder and acknowledges that the Company expects that it will enter into
registration rights agreements of similar tenor and effect respecting additional
shares of Common Stock to be issued.
AGREEMENT
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by reference, and for and in consideration of the mutual promises and
covenants of the parties set forth herein, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Agreement" shall mean this Agreement.
(b) "Common Stock" shall mean the common stock of the Company,
par value $0.001 per share.
(c) "Company" has the meaning set forth in the introductory
paragraph of this Agreement.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(e) "Holder" means a holder of Registrable Securities, or any
permitted assignee of any of the foregoing, if the transfer to such
assignee has been recorded in the corporate books and records of the
Company, in accordance with the provisions of this Agreement.
(f) "Holders" shall mean the Holder together with all other
holders of Registrable Securities.
(g) "Initial Public Offering" means the Company's first public
offering of its Common Stock registered under the Securities Act that
is the subject of a firm underwriting commitment.
(h) "Initiating Holders" shall mean one or more Holders who
demand that the Company file a registration statement in accordance
with section 2(a).
(i) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement
or document.
(j) "Registrable Securities" means the Common Stock issued or
issuable by the Company to the Holder and any Common Stock or other
securities issued or issuable in respect of such shares upon any stock
split, stock dividend, recapitalization, or similar event, or any
Common Stock otherwise issued or issuable with respect to such shares,
provided, however, that shares of Common Stock or other securities held
by a particular Holder shall cease to be a Registrable Securities for
purposes of this Agreement at such time as: (i) counsel to the Company
renders an opinion to the Holder of such shares or security to the
effect that such shares or security can be freely transferred without
registration under the Securities Act, either through a sale of all of
such securities of such Holder in a single 90-day period by satisfying
all of the conditions of Rule 144 or otherwise (which counsel and
opinion shall be reasonably acceptable to such Holder); (ii) counsel to
such Holder of such shares or security renders an opinion to the
Company to the effect that such shares or security can be freely
transferred without registration under the Securities Act, either
through a sale of all of such securities of such Holder in a single
90-day period by satisfying all of the conditions of Rule 144 or
otherwise (which counsel and opinion shall be reasonably acceptable to
the Company); (iii) securities for which a registration statement
respecting the sale of such securities has become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement; (iv) such securities have
been sold as permitted by Rule 144 (or any successor provision) under
the Securities Act and the purchaser thereof does not receive
"restricted securities" as defined in Rule 144; (v) such securities
have been held, either separately or in the aggregate, to the extent
tacking of holding periods is permitted under the Securities Act, for
the period specified in paragraph (k) of Rule 144 (or any similar
provision then in force), so as to permit the sale of such shares by
such Holder, to the extent such Holder is eligible to rely on paragraph
(k) of Rule 144, without restrictions on transfer under the Securities
Act; or (vi) such securities shall have ceased to be outstanding.
(k) "Registration Expenses" shall mean all expenses incurred
by the Company in complying with sections 2, 3, and 4 hereof, including
all registration, qualification, and filing fees; printing expenses;
escrow fees; fees and disbursements of counsel for the Company; fees
and expenses incurred in qualifying the subject securities for resale
in applicable states; 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).
(l) "Securities Act" means the Securities Act of 1933, as
amended, or any similar or successor federal statute and the rules and
regulations of the SEC thereunder, all as the same shall be in effect
at the time.
(m) "SEC" means the United States Securities and Exchange
Commission.
(n) "Selling Expenses" shall mean all underwriting discounts,
selling commissions, and stock transfer taxes applicable to the
securities registered by the Holders and all fees and disbursements of
counsel for the Holders.
(o) "Violation" has the meaning set forth in section 10(a)
hereof.
2. Demand Registration.
(a) Subject to the conditions of this section 2, if the
Company shall receive a written request from the Initiating Holders
that the Company file a registration statement under the Securities Act
covering the registration of the Registrable Securities, then the
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Company shall promptly, but in any case not later than 45 days after
the receipt thereof, give written notice of such request to all Holders
and, subject to the limitations of this section 2, use its best efforts
to effect, as soon as practicable, and in any event within 120 days of
the receipt of such request, the registration under the Securities Act
of all Registrable Securities that the Holders request to be
registered.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to this section 2 or any request pursuant to
section 4, and the Company shall include such information in the
written notice it provides to the Holders referred to in section 2(a)
or section 4(a), as applicable. In such event, the right of any Holder
to include its Registrable Securities in such registration 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. A Holder may elect to
include in such underwriting all or fewer than all of the Registrable
Securities such Holder holds. All Holders proposing to distribute their
securities through such underwriting shall, together with the Company,
enter into an underwriting agreement in customary form and terms with
the underwriter or underwriters selected for such underwriting by the
Company, and customary selling stockholder documents, including a
custody agreement and power of attorney. Prior to entering any
underwriting agreement, the Company must agree to the terms of the
underwriting, which consent will not be unreasonably withheld.
Notwithstanding any other provision of this section 2 or section 4, if
the underwriter advises the Company in writing that marketing factors
require a limitation of the number of securities to be underwritten
(including Registrable Securities), then the Company shall so advise
all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of Registrable Securities
that may be included in the underwriting shall be allocated: first, to
the Holders on a pro rata basis based on the total number of
Registrable Securities held by such Holders; and, second, to the
Company; and, third, to any other selling stockholders of the Company
on a pro rata basis based on the total number of securities held by
each such selling stockholder.
(c) If a person who has requested inclusion in such
registration as provided above does not agree to the terms of any such
underwriting, such person shall be excluded therefrom by written notice
from the Company, the underwriter, or the Initiating Holders. Any
Registrable Securities or other securities excluded or withdrawn from
such underwriting shall also be withdrawn from such registration. If
shares are so withdrawn from the registration and if the number of
shares to be included in such registration was previously reduced as a
result of marketing factors pursuant to section 2(b), then the Company
shall offer to all Holders who have not so withdrawn their securities
from the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so
withdrawn, with such shares to be allocated among the Holders of
Registrable Securities requesting additional inclusion in proportion
(as nearly as practicable) to the amount of Registrable Securities
owned by each such Holder. For any Holder that is a partnership or
corporation, the partners, retired partners, and stockholders of such
Holder, or the estates and family members of any such partners and
retired partners and any trusts for the benefit of any of the foregoing
persons, shall be deemed a single "Holder," and any pro rata reduction
with respect to such "Holder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and
individuals included in such "Holder" as defined in this sentence.
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(d) Notwithstanding the above provisions, the Company shall
not be required to effect a registration pursuant to this section 2:
(i) if the anticipated aggregate offering price, net
of underwriting discounts and commissions, would not exceed
$10,000,000;
(ii) prior to the earlier of (1) three years from the
date of this Agreement and (2) 180 days following the
effective date of the registration statement pertaining to the
Initial Public Offering;
(iii) after the Company has effected one registration
pursuant to this section 2, and such registrations have been
declared or ordered effective; provided, however, that in the
event that less than 50% of the Registrable Securities
requested by the Holders to be registered are included in a
registration due to limitations on the number of Registrable
Securities that may be included in that registration in
accordance with section 2(b) above, that registration shall
not be treated as a registration for purposes of the foregoing
limitation;
(iv) if, within 60 days of receipt of a written
request from the Initiating Holders pursuant to section 2(a),
the Company gives notice to the Holders of the Company's
intention to make a public offering within 180 days; provided
that the Company makes reasonable good faith efforts to cause
the registration statement in connection with any such public
offering to become effective;
(v) if the Company shall furnish to Holders
requesting a registration statement pursuant to this section 2
a certificate signed by the chairman of the board of directors
of the Company stating that in the good faith judgment of the
board of directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such
registration statement to be effected at such time, and the
board of directors concludes, as a result, that it is
therefore essential to defer such filing for a period of not
more than 180 days after receipt of the request of the
Initiating Holders; provided that such right to delay a
request shall be exercised by the Company not more than once
in any 12-month period;
(vi) if the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately
registered on Form S-3 pursuant to a request made pursuant to
section 4 below; or
(vii) during the period starting with the date of
filing of, and ending on the date 180 days following the
effective date of, the registration statement pertaining to a
public offering other than an offering made pursuant to
section 2 or section 4 hereof; provided that the Company makes
reasonable good faith efforts to cause such registration
statement to become effective.
3. Company Registration and Participatory Registration Rights.
(a) The Company shall notify all Holders of Registrable
Securities in writing at least 30 days prior to the filing of any
registration statement under the Securities Act for purposes of a
public offering of securities of the Company, including a registration
effected for stockholders other than the Holders, registration
statements relating to its Initial Public Offering and to secondary
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offerings of securities of the Company, but excluding registration
statements relating to employee benefit plans, exchange offers, or debt
securities or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act. Each Holder desiring
to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within 20 days after receipt
of the above-described notice from the Company, notify the Company in
writing. In such written notification, a Holder may request that all or
a part of a Holder's Registrable Securities be included in such
registration. The Company shall, subject to the provisions of
subsection (c) below, include in such registration (and any related
qualification under state securities laws or other compliance) all the
Registrable Securities that each such Holder has requested to be
registered.
(b) If a Holder decides not to include all of its Registrable
Securities, or if the number of Registrable Securities to be included
is reduced to fewer than all of its Registrable Securities pursuant to
subsection (c) below, in any registration statement thereafter filed by
the Company, such Holder shall nevertheless continue to have the right
to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(c) If the registration statement under which the Company
gives notice under this section 3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities in the
written notice provided pursuant to subsection (a) above. In such
event, the right of any such Holder to be included in a registration
pursuant to this section 3 shall be conditioned upon the Holder's
participation in the underwriting and the inclusion of the Holder's
Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their Registrable
Securities through the underwriting shall enter into an underwriting
agreement (together with the Company and the other Holders of
securities of the Company with registration rights to participate
therein distributing their securities through such underwriting) in
customary form with the underwriter or underwriters selected for such
underwriting by the Company and customary selling stockholder
documents, including a custody agreement and power of attorney. The
underwriting agreement in customary form and terms shall be subject to
acceptance by the Company, which acceptance shall not be unreasonably
withheld. Notwithstanding any other provision of the Agreement, if the
underwriters determine in good faith that marketing factors require a
limitation of the number of shares to be underwritten to ensure the
success of the offering, the number of shares that may be included in
the underwriting shall be allocated: first, to the Company; second, to
the Holders on a pro rata basis based on the total number of
Registrable Securities held by each such Holder; and, third, to any
other selling stockholders of the Company on a pro rata basis based on
the total number of securities held by each such selling stockholder.
(d) 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, delivered at least 10
business days prior to the effective date of the registration
statement. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration. If
shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration
was previously reduced as a result of marketing factors, the Company
shall then offer to all persons who have not so withdrawn their
securities from the registration and otherwise have the right to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated first
to the Holders requesting additional inclusion on a pro rata basis,
and, second, to any other selling stockholders of the Company
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requesting additional inclusion on a pro rata basis. For any Holder
that is a partnership or corporation, the partners, retired partners,
and stockholders of such Holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons, shall be deemed a single "Holder," and
any pro rata reduction with respect to such "Holder" shall be based
upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder" as defined in
this sentence.
(e) The Company shall have the right to terminate or withdraw
any registration initiated by it under this section 3 prior to the
effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company
in accordance with section 8 hereof.
4. Form S-3 Registration.
(a) After the Company's Initial Public Offering or
registration of its Common Stock under Section 12 of the Exchange Act,
the Company shall use its best efforts to qualify for registration on
Form S-3 or any comparable or successor form or forms. In case the
Company shall receive from any Holder or Holders of Registrable
Securities a written request or requests that the Company effect a
registration on Form S-3 or any similar short-form registration
statement and any related qualification or compliance with respect to
all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to
all other Holders of Registrable Securities;
(ii) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other Holder or Holders, joining in such
request as are specified in a written request given within 20
days after receipt of such written notice from the Company;
and
(iii) subject to the foregoing, the Company shall
file a Form S-3 registration statement covering the
Registrable Securities and other securities so requested to be
registered as soon as practicable after receipt of the request
or requests of the Holders. Registrations effected pursuant to
this section 4 shall not be counted as demands for
registration pursuant to section 2.
(b) Notwithstanding the forgoing provisions, the Company shall
not be obligated to effect any such registration, qualification, or
compliance pursuant to this section 4:
(i) if Form S-3 (or any successor or similar form) is
not available for such offering by the Holders;
(ii) if less than one year has elapsed since the
effective date of the Initial Public Offering or the
registration of the Company's Common Stock under Section 12 of
the Exchange Act;
(iii) if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and
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such other securities (if any) at an aggregate price to the
public of less than $2,000,000;
(iv) if the Company shall furnish to the Holders a
certificate signed by the chairman of the board of directors
or president of the Company stating that in the good faith
judgment of the board of directors, it would be seriously
detrimental to the Company and its stockholders for such Form
S-3 registration to be effected at such time, and the board of
directors concludes, as a result, that it is, therefore,
essential to defer the filing of the Form S-3 registration
statement for a period of not more than 180 days after receipt
of the request of the Holder or Holders under this section 4;
provided that such right to delay a request shall be exercised
by the Company not more than once in any 12-month period;
(v) if the Company has effected one registration on
Form S-3 for the Holders pursuant to this section 4 in the
preceding 12-month period, and such registrations have been
declared or ordered effective; or
(vi) to the extent the Registrable Securities to be
included in such registration, qualification, or compliance
for any single Holder exceeds the greater of 5% of the number
of shares of Common Stock of the Company outstanding on the
date of filing the registration statement or $750,000.
5. Limitations on Subsequent Participatory Registration Rights. The
Company has not, and from and after the date hereof the Company shall not,
without the consent of the Holders of at least 50% of the Registrable
Securities, enter into any agreement granting any Holder or prospective holder
of any securities of the Company registration rights with respect to such
securities unless such new registration rights, including market standoff
obligations, are on a pari passu basis with or subordinate to those rights of
the Holders hereunder.
6. Obligations of the Company. Whenever required under this Agreement
to effect the registration of any Registrable Securities, the Company shall
proceed diligently and in good faith to:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use commercially
reasonable best efforts to cause such registration statement to become
effective and keep such registration statement effective until the
earliest of the passage of 180 days, until all Registrable Securities
included therein have been sold by the selling Holder(s), or until the
Company has received an opinion from its legal counsel that the sale of
such securities is no longer required to be registered by reason of
Rule 144(k) adopted under the Securities Act;
(b) use commercially reasonable best efforts to 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 securities
covered by such registration statement for a period of at least one
year, excluding any period during which securities cannot be sold
thereunder as described in subsection (f) of this section and section
7(b);
(c) furnish to the Holders of the Registrable Securities
included in such registration statement such numbers of copies of a
prospectus, including a 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;
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(d) use commercially reasonable best efforts to register and
qualify the securities covered by such registration statement under
such other or state securities laws of such jurisdictions as shall be
reasonably requested by the Holders; provided that, the Company is not
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 of
Registrable Securities, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering;
(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, of the
happening of any event that limits the Holder's ability to rely on such
registration statement, including any event that results in the
prospectus included in such registration statement, as then in effect,
containing an untrue statement of a material fact or omitting 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; any stop order issued by the SEC or any state securities
agency; or the suspension or limitation of any state exemption on which
the Company and the Holders are relying, in which case, the Company
shall use commercially reasonable best efforts to file an amendment to
update the registration statement to the extent necessary or to take
other remedial action;
(g) 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; and
(i) in the event of an underwritten public offering of
Registrable Securities, use commercially reasonable best efforts to
furnish, if required under the terms of the underwriting agreement, on
the date that such Registrable Securities are to be delivered to the
underwriters for sale in connection with a registration: (i) an opinion
of the counsel representing the Company for the purposes of such
registration, dated such date, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the Holders requesting registration of
Registrable Securities, and (ii) a letter from the independent
certified public accountants of the Company dated such date, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
7. Cooperation by the Holder.
(a) Each Holder shall furnish to the Company in writing such
information and affidavits as the Company may reasonably require from
the Holders in connection with any registration, qualification, or
compliance with respect to such Registrable Securities. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Agreement with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to the
Company such information regarding the Holder, the Registrable
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Securities and other securities in the Company held, and the intended
method of disposition of such securities as shall be required to effect
the registration of such Holder's Registrable Securities.
(b) Upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (f) of
section 6, Holder will forthwith discontinue disposition of the
Registrable Securities until Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (f) of
section 6 or until it is advised in writing by the Company that the use
of such prospectus may be resumed and has received copies of any
additional or supplemental filings that are incorporated by reference
in such prospectus, and if so directed by the Company, Holder will, or
will request the managing underwriter or underwriters, if any, to,
deliver to the Company all copies, other than permanent file copies
then in Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
(c) At the end of any periods during which the Company is
obligated to keep any registration statement current and effective as
provided herein, Holder shall discontinue sales of securities pursuant
to such registration statement upon receipt of notice from the Company
of its intention to remove from registration the securities covered by
such registration statement that remain unsold, and Holder shall notify
the Company of the number of securities registered that remain unsold
promptly after receipt of such notice from the Company.
(d) Holder acknowledges that the registration of the sale of
the Registrable Securities or the availability of an exemption from
registration in certain states may impose certain limitations and
conditions on the manner and nature of such sales. The Company shall
advise Holder in writing of such registration or exemption and the
related limitations and conditions from time to time. Holder shall be
solely responsible for Holder's own compliance with such limitations
and conditions.
8. Expenses of Registration. All Registration Expenses incurred in
connection with any registration pursuant to sections 2, 3, and 4 shall be borne
by the Company. All Selling Expenses in any such registration shall be borne by
the Holders of Registrable Securities pro rata on the basis of the number of
shares to be registered.
9. Delay of Registration. No Holder shall 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 Agreement.
10. Indemnification. In the event any Registrable Securities are
included in a registration statement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder whose Registrable Securities are included
in a registration statement, any underwriter (as defined in the
Securities Act) for such Holder, and each person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, or liabilities
to which they may become subject under the Securities Act, insofar as
such losses, claims, damages, or liabilities 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
9
misleading; or (iii) any Violation or alleged Violation by the Company
of the Securities Act or any rule or regulation promulgated under the
Securities Act; and the Company will pay to each such Holder,
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 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 Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation
that occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any
such Holder, underwriter, or controlling person.
(b) To the extent permitted by law, each selling Holder whose
Registrable Securities are included in a registration statement 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 Securities Act,
any underwriter, any other Holder selling securities in such
registration statement, and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or
liabilities to which any of the foregoing persons may become subject
under the Securities Act or the Exchange Act, 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 such Holder expressly
for use in connection with such registration; and each such Holder will
pay any legal or other expenses reasonably incurred by any person
intended to be indemnified in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement 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. Notwithstanding the
foregoing provision, the Holder's indemnification obligation under this
subsection shall not exceed the amount received by such Holder on the
sale of securities pursuant to the registration statement.
(c) Promptly after receipt by an indemnified party of notice
of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this subsection, deliver to
the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties
that 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, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified
party under this subsection, 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
subsection.
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(d) If the indemnification provided for in this section 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 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 foregoing provision, the contribution obligation of
each Holder shall not exceed the amount received by that Holder from
the sale of securities pursuant to the 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 an 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 shall survive the completion of any offering of Registrable
Securities pursuant to a registration statement.
11. Current Public Information. With a view to making available the
benefits of certain rules and regulations of the SEC that may at any time permit
the sale of the restricted securities to the public without registration, after
such time as the Shares have been held, either separately or in the aggregate,
to the extent tacking of holding periods is permitted under the Securities Act,
to satisfy the requirements of paragraph (d) of Rule 144 through the date after
which the restricted securities can be resold without restriction and without
complying with Rule 144 pursuant to the provisions of paragraph (k) of Rule 144
or any successor rule, the Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all
times after the effective date that the Company becomes subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act (at any time
after it has become subject to such reporting requirements); and
(c) furnish to the Holders forthwith upon 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
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 of the Company as the
Holders may reasonably request in availing themselves of any rule or
regulation of the SEC allowing a Holder to sell any such securities
without registration.
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12. Transfer of Registration Rights. The rights and all related
obligations under this Agreement shall automatically be transferred to and
binding on any transferee or assignee of the Registrable Securities; provided
that: (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement; (c) the transfer or
assignment is in compliance with the Securities Act and applicable state
securities law or an exemption from the registration requirements of the
Securities Act and applicable state securities laws; and (d) such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act.
13. Market Stand Off Agreement. In order to facilitate the possibility
of future public offerings of Common Stock, the Holder and any subsequent Holder
agree that the shares of Common Stock included in the Registrable Securities
will not be resold during a period commencing 15 days preceding the effective
date of a registration statement under the Securities Act for a public offering
for cash by the Company of its Common Stock or securities convertible into or
exercisable or exchangeable for its Common Stock and continuing until the
earlier of abandonment of the proposed public offering or 90 days following the
date of the last closing in the public offering period, but not to exceed, in
any event, 180 days. Holders of such securities shall cooperate with the Company
in providing reasonable written assurances respecting the foregoing to the
underwriter of any such public offering. During the above restricted period,
Holders shall not directly or indirectly sell, offer to sell, contract to sell
(including any short sale), grant any option to purchase, or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) shares of
Common Stock included in the Registrable Securities at any time during such
period except securities included in such registration. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions respecting
such shares of Common Stock held by each Holder, which shall be binding on any
assignee or successor of such Holder (and the shares or securities of every
other person subject to the foregoing restriction), until the end of such
restricted period. At the request of the company, the Holder will confirm in
writing the foregoing covenant.
14. Miscellaneous.
(a) 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 permitted 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.
(b) This Agreement shall be governed by and construed under
the laws of the state of Nevada.
(c) 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.
(d) 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.
(e) This Agreement may be executed in one or more counterparts
of like tenor, each of which shall be deemed an original, and all of
which taken together shall be considered a single instrument.
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(f) Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be
deemed effectively given if delivered personally, by facsimile
transmission (if receipt is confirmed by the facsimile operator of the
recipient), by overnight courier service, or by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
addresses indicated for such party on the signature page hereof. For
the purposes of any notice required to be given to Holders, the Company
can rely on the address for the registered holder of the securities in
question as reflected on its stock transfer records, and such notice
shall be deemed adequate notice to the original or any subsequent
Holder. Any notice hereunder delivered in person or by facsimile (if
receipt is confirmed by the facsimile operator of the recipient) shall
be deemed given on the date hereof; any notice by registered or
certified mail shall be deemed given three days after the date of
mailing; and any notice by overnight courier shall be deemed given one
day after the date so sent, provided that notices of a change of
address shall be effective only upon receipt thereof.
(g) 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.
(h) The parties hereby specifically acknowledge that monetary
damages for breach of this Agreement may be difficult to determine
and/or inadequate to compensate the parties for such breach and hereby
agree that, in the event of any breach, the parties, in addition to any
other remedies they may have under the terms of this Agreement or at
law, shall have the right to bring an action in equity for an
injunction against the breach or threatened breach or seeking specific
performance of the obligations of the other party under the terms of
this Agreement.
(i) 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 of at least two-thirds of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this
subsection shall be binding upon each Holder of any Registrable
Securities then outstanding, each future holder of all such Registrable
Securities, and the Company.
(j) 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.
(k) 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.
(l) This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the
subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
EAGLE LAKE INCORPORATED
___________________________
Name: Xxxxxx X. Xxxxx
Title: President
HOLDER
___________________________
Signature
___________________________
Printed Name
___________________________
Number and Street
___________________________
City, State, and Zip
Schedule of Registration Rights Agreements
On August 30, 2005, the Company executed Registration Rights Agreements in the
foregoing form with the named executive officers indicated below:
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxx
Xxxx Xxxxxxxxx
Xxxxxx X. Xxxxxx III
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