Exhibit 10.1
CALIBRE ENERGY, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of October
31, 2005, by and among Calibre Energy, Inc., a Delaware corporation (the
"Company"), and the undersigned holders of common stock of the Company together
with their qualifying transferees (the "Holders").
RECITALS:
A. The Company has sold 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 Common Shares is conditional upon the extension 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.
(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).
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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 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.
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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 a merger
with a company that has shares of common stock that are registered under Section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
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:
(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.
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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:
(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.
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(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.
(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
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.
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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;
(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.
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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 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 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.
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(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 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.
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(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.
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.
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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).
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.
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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 Delaware 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.
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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.
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.
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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 Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
-----------------------------------
Print Name: Xxxxxxx X. Xxxxxxxxx
--------------------
Title: President
---------
Date: October 31, 2005
"HOLDER"
By: _________________________________
Print: _______________________________
Date: _______________, 2005
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