LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made as of July 1, 1996, by
and between SAGE RESOURCES, INC. (referred to herein as the "Borrower"), and
MAROON BELLS CAPITAL PARTNERS, INC. (referred to herein as the "Lender").
R E C I T A L S
A. Lender has agreed to lend up to Five Hundred Thousand Dollars
($500,000) to Borrower pursuant to a Convertible Secured Promissory Note dated
July 1, 1996 (the "Note").
NOW, THEREFORE, in consideration of the covenants and conditions herein
contained, the parties agree as follows:
1. DEFINITIONS.
(a) As used herein, the following terms shall have the
meanings set forth below:
"Agreement" shall mean this Loan Agreement, as the same may be
amended and supplemented as hereinafter provided.
"Assignment, Pledge and Security Agreement" means that certain
Assignment, Pledge and Security Agreement of even date between Borrower
and Lender.
"Event of Default" shall mean the occurrence of any of the
events listed in paragraph 6(a) and the expiration of any applicable
notice and cure period provided therein.
"Interest Rate" shall mean ten percent (10%) per annum.
"Loan" shall mean the loan from Lender to Borrower described
in this Agreement in the principal amount of the Loan Amount.
"Loan Amount" shall mean the amount of Five Hundred Thousand
Dollars ($500,000).
"Loan Documents" shall mean this Agreement, the Assignment,
Pledge and Security Agreement, and the Note.
"Maturity Date" shall mean the date of Closing as contemplated
in the proposed Stock Purchase Agreement between the Shareholders of
COM TECH International Corporation and Borrower unless such Closing
does not occur within thirty (30) days from the date hereof. If such
Closing does not occur within the thirty (30) day time frame, the
Maturity Date will be ninety (90) days thereafter.
"Person" shall mean any natural person, any unincorporated
association, any corporation, any partnership, any joint venture, any
trust, any other legal entity, or any governmental authority.
(b) Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein or in the Recitals shall
have the meanings assigned to them in conformity with Generally
Acceptable Accounting Practices and Principles.
2. THE LOAN
(a) Agreement to Lend and Borrow. Subject to the terms and
conditions of this Agreement, Lender agrees to lend to Borrower and
Borrower agrees to borrow from Lender the Loan Amount;
(b) Evidence of Indebtedness. The Loan shall be evidenced
by the Note. In the event of any inconsistency between the Note and
this Agreement, the provisions of this Agreement shall prevail;
(c) Security for Obligations. The Loan shall be secured by an
Assignment, Pledge and Security Agreement whereby Borrower shall pledge
to Lender its rights, title and interest in that certain Secured
Promissory Note of COM TECH, dated June 27, 1996, together with all
rights of Borrower under the Loan Agreement and Assignment, Pledge and
Security Agreement entered into in connection herewith;
(d) Interest. Interest at the Interest Rate shall accrue
and become due and payable pursuant to the terms of the Note. Interest
shall be calculated on the basis of a 360-day year and 30-day month;
(e) Payment of Principal and Interest. The outstanding
principal balance of the Loan, together with all unpaid accrued
interest thereon, and all other amounts payable by Borrower with
respect to the Note or pursuant to the terms of any other Loan
Documents, shall be due and payable in lawful money of the United
States of America at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx, 00000 in same day funds, not later than the Maturity Date
in accordance with the Note. If the Closing contemplated by the
proposed Stock Purchase Agreement between the Shareholders of COM TECH
International Corporation and Borrower occurs, Lender may elect to
convert the unpaid principal and interest of the Loan into 250,000
shares of Borrower's Common Stock at such Closing in accordance with
the Note. Such shares will have one-time demand registration rights and
piggy-back registration rights, as set forth in the Registration Rights
Agreement attached hereto as Exhibit "A" and incorporated herein by
this reference;
(f) Prepayment of Principal. Borrower shall have the right to
prepay the Loan, in whole or in part, at any time, without premium or
penalty.
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56259.2
3. LOAN CLOSING
(a) Closing. The transactions contemplated in this Agreement
shall close on July 1, 1996, o r at such later date and time as the
parties shall agree;
(b) Conditions Precedent. Lender's obligation to disburse the
Loan and to perform the remainder of its obligations under this
Agreement are expressly conditioned upon Borrower's delivery to Lender
of the following documents, in form and content satisfactory to Lender,
duly executed (and acknowledged where necessary) by the appropriate
parties thereto:
(i) This Agreement;
(ii) The Note;
(iii) The Assignment, Pledge and Security Agreement; and
(iv) Such other documents as Lender may reasonably require.
4. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender that the representations and warranties contained in the proposed Stock
Purchase Agreement between Borrower and the Shareholders of COM TECH
International Corporation, incorporated herein by this reference, are true,
correct and complete as of the date hereof, and will be true, correct and
complete as of the date of closing.
5. COVENANTS OF BORROWER. As an inducement to Lender to execute this
Agreement and to disburse the Loan, Borrower hereby covenants as set forth in
this paragraph 5, which covenants shall remain in effect so long as the Note
shall remain unpaid;
(a) Lender Inspections. Throughout the term of the Loan,
Borrower will permit Lender and Lender's representatives, inspectors
and consultants to audit, examine and copy all contracts and records
(including, but not limited to, financial and accounting records
pertaining to the Loan) and to discuss the affairs, finances and
accounts of Borrower with representatives of Borrower;
(b) Financial Statements and Reports. As soon as available,
and in any event within sixty (60) days of the end of each fiscal
quarter of Borrower, Borrower shall furnish to Lender a copy of its
financial statements as filed with the Securities and Exchange
Commission;
(c) Representations and Warranties. Until repayment of the
Note, the representations and warranties of paragraph 4 shall remain
true and complete;
(d) Trade Names. Borrower shall immediately notify Lender in
writing of any change in the legal, trade or fictitious business names
used by Borrower and shall, upon
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56259.2
Lender's request, execute any additional financing statements and other
certificates necessary to reflect the change in trade names or
fictitious business names;
(e) Further Assurances. Borrower shall execute and deliver
from time to time, promptly after any request therefor by Lender, any
and all instruments, agreements and documents and shall take such other
action as may be necessary or desirable in the opinion of Lender to
maintain, perfect or insure Lender's security provided for herein and
in the other Loan Documents, all as Lender shall reasonably require,
and Borrower shall pay all fees and expenses (including reasonable
attorneys' fees) related thereto;
(f) Notice of Litigation. Borrower will give, or cause to be
given, prompt written notice to Lender of (i) any action or proceeding
which is instituted by or against it in any Federal or state court or
before any commission or other regulatory body, Federal, state or
local, foreign or domestic, or any such proceedings which are
threatened against it which, if adversely determined, could have a
material and adverse effect upon its business, operations, properties,
assets, management, ownership or condition (financial or otherwise),
and (ii) any other action, event or condition of any nature which may
have a material and adverse effect upon its business, operations,
management, assets, properties, ownership or condition (financial or
otherwise), or which, with notice or lapse of time or both, would
constitute an Event of Default or a default under any other contract,
instrument or agreement to which it is a party or to which it or any of
its properties or assets may be bound or subject;
(g) No Impairment. The Borrower will not, by amendment of its
Certificate of Incorporation or Bylaws or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of the Loan Documents,
but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate in order to protect the rights of the Lender hereunder.
6. EVENTS OF DEFAULT AND REMEDIES
(a) Events of Default. The occurrence of any one or more
of the following shall constitute an Event of Default under this
Agreement:
(i) Failure by Borrower to pay any monetary amount
when due under any Loan Document;
(ii) Failure by Borrower to perform any obligation
not involving the payment of money, or to comply with any
other term or condition applicable to Borrower, under any Loan
Document and the expiration of ten (10) days after written
notice of such failure by Lender to Borrower;
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56259.2
(iii) Failure by Borrower to perform any obligation,
or to comply with any other term or condition applicable to
Borrower, under any agreement entered into between Borrower
and COM TECH International Corporation;
(iv) Any representation or warranty by Borrower in any
Loan Document is materially false, incorrect, or misleading as
of the date made;
(v) The occurrence of any event (including, without
limitation, a change in the financial condition, business, or
operations of Borrower for any reason whatsoever) that
materially and adversely affects the ability of Borrower to
perform any of its obligations under the Loan Documents;
(vi) Borrower (1) is unable or admits in writing its
inability to pay its monetary obligations as they become due,
(2) makes a general assignment for the benefit of creditors,
or (3) applies for, consents to, or acquiesces in, the
appointment of a trustee, receiver, or other custodian for
Borrower or the property of Borrower or any part thereof, or
in the absence of such application, consent, or acquiescence,
a trustee, receiver, or other custodian is appointed for
Borrower or the property of Borrower or any part thereof, and
such appointment is not discharged within sixty (60) days;
(vii) Commencement of any case under the Bankruptcy
Code, Title 11 of the United States Code, or commencement of
any other bankruptcy arrangement, reorganization,
receivership, custodianship, or similar proceeding under any
Federal, state, or foreign law by or against Borrower and with
respect to any such case or proceeding that is involuntary,
such case or proceeding is not dismissed with prejudice within
sixty (60) days of the filing thereof;
(viii) Any litigation or proceeding is commenced
before any governmental authority against or affecting
Borrower or the property of Borrower or any part thereof and
such litigation or proceeding is not defended diligently and
in good faith by Borrower;
(ix) All or any part of the property of Borrower is
attached, levied upon, or otherwise seized by legal process,
and such attachment, levy, or seizure is not quashed, stayed,
or released within twenty (20) days of the date thereof;
(x) The occurrence of any Event of Default, as such
term is defined in any other Loan Document.
(b) Remedies. Notwithstanding any provision to the contrary
herein or any of the other Loan Documents, upon the happening of any
Event of Default under this Agreement, or upon an Event of Default
under any of the other Loan Documents, Lender shall have, at its
option, and in addition to any other remedies provided in the Loan
Document breached by Borrower, (i) the option to declare all
outstanding
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56259.2
indebtedness to be immediately due and payable without presentment,
demand, protest or notice of any kind; (ii) the right, at its option,
to apply any of Borrower's funds in its possession to the outstanding
indebtedness under the Note, whether or not such indebtedness is then
due; and (iii) the right to exercise all rights and remedies available
to it under any or all of the Loan Documents. Nothing contained in this
Agreement or in any of the Loan Documents shall in any way restrict or
limit the rights, remedies and recourse to all assets for Borrower for
all amounts due and payable with respect to the Loan and all other
amounts due under the Loan Documents.
7. MISCELLANEOUS
(a) Assignment. Borrower shall not assign any of its rights
under this Agreement;
(b) Notices. All notices, requests, demands and consents to be
made hereunder to the parties hereto shall be in writing and shall be
delivered by hand or sent by registered mail or certified mail, postage
prepaid, return receipt requested, through the United States Postal
Service to the addresses shown below or such other address which the
parties may provide to one another in accordance herewith. Such
notices, requests, demands and consents, if sent by mail shall be
deemed given two (2) business days after deposit in the United States
mail, and if delivered by hand, shall be deemed given when delivered;
To Lender: Maroon Bells Capital Partners, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000
To Borrower: Sage Resources, Inc.
#00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
(c) Authority to File Notices. Borrower irrevocably appoints
Lender as it attorney-in-fact, with full power of substitution, to
file for record, at the Borrower's cost and expense and in Borrower's
name, any notices that Lender considers necessary or desirable to
protect its security;
(d) Inconsistencies with the Loan Documents. In the event of
any inconsistencies between the terms of this Agreement and any terms
of any of the Loan Documents, the terms of this Agreement shall govern
and prevail;
(e) Lender Approval of Instruments and Parties. All
proceedings taken in accordance with transactions provided for herein;
all surveys, appraisals and documents required or contemplated by this
Agreement and the persons responsible for the execution and preparation
thereof; shall be satisfactory to and subject to approval by Lender.
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56259.2
Lender's counsel shall be provided with copies of all documents which
they may reasonably request in connection with the Agreement;
(f) Lender Determination of Facts. Lender shall at all times
be free to establish independently, to its satisfaction, the existence
or nonexistence of any fact or facts, the existence or nonexistence of
which is a condition of this Agreement;
(g) Incorporation of Preamble, Recitals and Exhibits. The
preamble, recitals and exhibits hereto are hereby incorporated into
this Agreement;
(h) Payment of Expenses. Borrower shall pay all taxes and
assessments and all expenses, charges, costs and fees provided for in
this Agreement or relating to the Loan, including, without limitation,
fees of any consultants, reasonable fees and expenses of Lender's
counsel, documentation and processing fees, printing and duplicating
expenses, and air freight charges. Borrower hereby authorizes Lender to
disburse the proceeds of the Loan to pay such expenses, charges, costs
and fees notwithstanding that Borrower may not have requested a
disbursement of such amount. Such disbursement shall be added to the
outstanding principal balance of the Note. The authorization hereby
granted shall be irrevocable, and no further direction or authorization
from Borrower shall be necessary for Lender to make such disbursements.
However, the provision of this paragraph shall not prevent Borrower
from paying such expense, charges, costs and fees from its own funds.
All such expenses, charges, costs and fees shall be Borrower's
obligation regardless of whether or not Borrower has requested and met
the conditions for the disbursement of the Loan;
(i) Disclaimer by Lender. Borrower is not and shall not be an
agent of Lender for any purpose. Lender is not a joint venture partner
with Borrower or with the constituent partners in Borrower in any
manner whatsoever. Approvals granted by Lender for any matters covered
under this Agreement shall be narrowly construed to cover only the
parties and facts identified in any written approval or, if not in
writing, such approvals shall be solely for the benefit of Borrower;
(j) Indemnification. To the fullest extent permitted by law,
Borrower agrees to protect, indemnify, defend and save harmless Lender,
its directors, officers, agents and employees for, from and against any
and all liability, expense or damage of any kind or nature and for,
from and against any suits, claims or demands, including reasonable
legal fees and expenses on account of any matter or thing or action or
failure to act by Lender, whether in suit or note, arising out of this
Agreement or in connection herewith. Upon receiving knowledge of any
suit, claim or demand asserted by a third party that Lender believes is
covered by this indemnity, Lender shall give Borrower notice of the
matter and an opportunity to defend it, at Borrower's sole cost and
expense, with legal counsel satisfactory to Lender. Lender may also
require Borrower to so defend the matter. The obligations on the part
of Borrower under this paragraph 7(j) shall survive the closing of the
Loan and the repayment thereof;
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56259.2
(k) Titles and Headings. The headings at the beginning of each
paragraph of this Agreement are solely for convenience and are not part
of this Agreement. Unless otherwise indicated, each reference in this
Agreement to a paragraph or an exhibit is a reference to the respective
paragraph herein or exhibit hereto;
(l) Change, Discharge, Termination, or Waiver. No provision of
this Agreement may be changed, discharged, terminated, or waived except
in writing signed by the party against whom enforcement of the change,
discharge, termination, or waiver is sought. No failure on the part of
Lender to exercise and no delay by Lender in exercising any right or
remedy under the Loan Documents or under the law shall operate as a
waiver thereof;
(m) Choice of Law. This Agreement and the transaction
contemplated hereunder shall be governed by and construed in accordance
with the laws of the State of Utah without giving effect to conflict of
laws principles;
(n) Time is of the Essence. Time is of the essence of this
Agreement;
(o) Attorneys' Fees. Borrower agrees to pay all costs of
enforcement and collection and preparation for any Event of Default or
any action taken by Lender (including, without limitation, reasonable
attorneys' fees) whether or not any action or proceeding is brought
(including, without limitation, all such costs incurred in connection
with any bankruptcy, receivership, or other court proceedings, whether
at the trial or appellate level), together with interest thereon from
the date of demand at the default interest rate;
(p) Consent to Jurisdiction. Borrower and Lender hereby
irrevocably consent and agree that any legal action, suit or proceeding
arising out of or in any way in connection with this Agreement, or
which is an appeal therefrom, may be instituted or brought in the
Federal District Court for the District of Utah and Borrower and Lender
hereby irrevocably consent and submit to, for themselves and in respect
of their property, generally and unconditionally, the jurisdiction of
such Court, and to all proceedings in such Court. Further, Borrower and
Lender irrevocably consent to actual receipt of any summons and/or
legal process at their respective addresses as set forth in this
Agreement as constituting in every respect sufficient and effective
service of process in any such legal action or proceeding. Borrower and
Lender further agree that final judgment in any such legal action, suit
or proceeding shall be conclusive and may be enforced in any other
jurisdiction, whether within or outside the United States of America,
by suit under judgment, a certified or exemplified copy of which will
be conclusive evidence of the fact and the amount of the liability;
(q) Provisional Remedies; Self Help; and Foreclosure. No
provision of paragraph 7(p) shall limit the right of any party to
exercise self-help remedies, to foreclose against any real or personal
property collateral, or to obtain any provisional or ancillary remedies
(including but not limited to injunctive relief or the appointment of a
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56259.2
receiver) from a court of competent jurisdiction. The institution and
maintenance of any remedy permitted above shall not constitute a waiver
of the rights to submit any controversy or claim to arbitration. The
statute of limitations, estoppel, waiver, laches, and similar doctrines
which would otherwise be applicable in an action brought by a party
shall be applicable in any arbitration proceeding;
(r) Integration. The Loan Documents contain the complete
understanding and agreement of Borrower and Lender and supersede all
prior representations, warranties, agreements, arrangements,
understandings, and negotiations;
(s) Binding Effect. The Loan Documents will be binding upon,
and inure to the benefit of, Borrower and Lender and their respective
successors and assigns. Borrower may not delegate its obligations under
the Loan Documents;
(t) Survival. The representations, warranties, and covenants
of the Borrower and the Loan Documents shall survive the execution and
delivery of the Loan Documents and the making of the Loan.
(u) Counterparts. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original, but
all such counterparts together shall constitute but one agreement;
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56259.2
IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to
be duly executed and delivered as of the date first above written.
"BORROWER"
SAGE RESOURCES, INC.
By: _________________________________
Name: _______________________________
Title: ________________________________
"LENDER"
MAROON BELLS CAPITAL PARTNERS, INC.
By: _________________________________
Name: _______________________________
Title: ________________________________
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56259.2
EXHIBIT "A"
REGISTRATION RIGHTS AGREEMENT
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56259.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is entered into
this July 1, 1996, by and between SAGE RESOURCES, INC.(the "Company") and MAROON
BELLS CAPITAL PARTNERS, INC. (the "Stockholder").
WHEREAS, pursuant to a Loan Agreement and Secured Convertible
Promissory Note of even date herewith, the Stockholder has the right to acquire
certain shares of Restricted Common Stock of the Company;
WHEREAS, as a condition to the loan by the Stockholder to the Company,
the Company has agreed to execute this Agreement in favor of the Stockholder.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
(a) "Shares" shall mean and include any of the following
securities: (i) up to 250,000 shares of common stock of the Company
(the "Common Stock") which will be acquired from the Company upon
conversion of that certain Convertible Secured Promissory Note, dated
July 1, 1996 executed in favor of Stockholder (the "Note"), or (ii) any
additional securities issued to the Stockholder with respect to the
foregoing upon any stock split, stock dividend, recapitalization,
dilution, adjustment or similar event;
2. "REGISTRATION RIGHTS".
(a) Piggyback Registration. If at any time the Company shall
propose to file with the Securities and Exchange Commission (the
"Commission") on behalf of the Company or any other stockholder a
registration statement under the Securities Act of 1933, as amended
(the "Act"), with respect to any class of security (as defined in
Section 3(a)(10) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), other than a registration statement approved by
the Board of Directors on Form S-4 or S-8, or such amended or
alternative form for Form S-4 or S-8 as the Commission may from time to
time require, the Company shall in each case timely notify the
Stockholder and include in such registration statement any or all of
the shares of Common Stock as the Stockholder may request within twenty
(20) days after the Company's giving of such notice, subject to the
conditions set forth herein;
(b) One-Time Demand Registration. If at any time after the
date which is six (6) months following any underwritten public offering
of the Company's Common Stock or other equity securities, and all or a
portion of the Common Stock of the Stockholder is excluded by the
underwriter in such offering pursuant to the terms and conditions of
this Agreement, and the Company shall receive a written request from
the Stockholder that the Company effect a registration with respect to
the issuance of the Shares underlying the Note on conversion of the
Note by the Stockholder, the Company shall promptly, subject
to the conditions and in accordance with the procedures hereinafter set
forth, prepare and file a registration statement on an appropriate form
as expeditiously as reasonable with respect to such Shares. The request
for registration pursuant to this Section shall specify the number of
shares to be registered and the manner of sale, including the name and
address of any proposed underwriter. The principal underwriter or
underwriters for any such offering shall be selected by the
Stockholder, subject to the reasonable acceptance of the Company. The
rights of the Stockholder to demand registration under this paragraph
2(b) shall expire upon the filing of the Registration Statement by the
Company after the initial demand made by the Stockholder;
(c) Registration Procedures. If, pursuant to Sections 2(a) or
2(b) hereof, the Company is required to include any Shares in a
registration statement proposed to be filed, the Company will, as
expeditiously as possible: (i) prepare and file such registration
statement under the Act on an appropriate form and use its reasonable
efforts to cause such registration statement to become effective; (ii)
prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Act
and the Exchange Act with respect to the offer of the securities
covered by such registration statement during the period required for
distribution of such securities (but in no case longer than ninety (90)
days); (iii) furnish to the holder of such Shares such number of copies
of such registration statement and all amendments thereto and of such
prospectus (including each preliminary, amended or supplemental
prospectus) as such holders may reasonably request in order to
facilitate the sale or transfer of the securities covered by such
registration statement; (iv) use its reasonable efforts to register or
qualify the securities covered by any such registration statement in
such jurisdictions as such holders may reasonably request; (v) furnish,
at the request of the Stockholder, on the date that such Shares are
delivered to the underwriters for sale pursuant to such registration
or, if such Shares are not being sold through underwriters, on the date
such registration statement becomes effective (A) an opinion, dated on
such date, in a form customary to such transactions, of the independent
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the Stockholder making
such request, reasonably acceptable in form and substance to such
underwriter and the Stockholder, and (B) a letter, dated on such date,
from the independent certified public accountants of the Company,
addressed to the underwriters, if any, and the Stockholder, stating
that they are independent certified public accountants within the
meaning of the Act and that in the opinion of such accountants, the
financial statements and other financial data of the Company included
in the registration statement or the prospectus, or any amendment or
supplement thereto (including, in each case, documents incorporated by
reference thereto), comply as to form in all material respects with the
applicable accounting requirements of the Act; such opinion of counsel
shall additionally cover such other legal matters with respect to the
registration statement and the Company as the underwriters, if any, or
the Stockholder may reasonably request; and such letter from the
independent certified public accountants shall additionally cover such
other financial matters (including information as to the period ending
not more than five (5) business days prior to the date of such letter)
with respect to the registration statement
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56262.2
and the Company as the underwriters, if any, or the Stockholder may
reasonably request; (vi) use its best efforts to keep such registration
and qualification effective until all exercises, sales and
distributions contemplated by the requests made pursuant to Sections
2(a) or 2(b) hereof shall have been completed, but not in any event for
a period in excess of ninety (90) days; and (vii) pay all expenses
incurred by the Company in complying with this Section 2(c), including
without limitation (A) all registration and filing fees; (B) all
printing expenses; (C) all fees and disbursements of counsel and
independent public accountants for the Company; (D) all Blue Sky fees
and expenses (including fees and expenses of counsel in connection with
Blue Sky surveys); and (E) the entire expense of any special audits
incident to or required by any such registration. Notwithstanding the
foregoing, the Company shall not be obligated to pay any underwriter's
discounts or commissions or attorneys' fees or expenses of the
Stockholder;
(d) Certain Conditions to Registration. The right of the
Stockholder to have any shares included in any registration statement
pursuant to the provisions of Sections 2(a) or 2(b) hereof shall be
subject to the following further conditions: (i) should the request for
registration be pursuant to Section 2(a), and should the registration
statement proposed by the Company relate to an underwritten offering of
securities of the Company, and should the managing underwriter for the
Company render a recommendation to the effect that such registration of
all or a part of the Shares would materially impair the Company's
ability to sell the securities being registered by the Company, then
the Stockholder shall be entitled to participate pro rata with all
other stockholders entitled to registration rights of equal priority
("Other Stockholder"), if any, based upon the number of shares owned by
or issuable to the Stockholder and each Other Stockholder in the
maximum amount of shares that such underwriter determines may be sold
without such impairment, after the Company has included all stock that
it desires to sell; (ii) the Stockholder shall furnish to the Company
in writing such information and documents as, in the opinion of counsel
to the Company, may be reasonably required to properly prepare and file
such registration statement in accordance with applicable provisions of
the Act; and (iii) if the Stockholder desires to sell and distribute
securities over a period of time, or from time to time at the
prevailing market prices pursuant to a registration statement to be
filed by the Company under the Act, then the Stockholder shall execute
and deliver to the Company such written undertakings as the Company and
its counsel may reasonably require in order to assure full compliance
with relevant provisions of the Act and the Exchange Act;
(e) Notices of Registration Statements, Etc. The Company
shall not file any registration statement under the Act covering any
debt or equity securities unless it shall first have given the
Stockholder written notice thereof;
3. EXPENSES. Except for underwriting discounts and commissions,
the Company shall pay any and all registration expenses.
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56262.2
4. TRANSFER OF REGISTRATION RIGHTS. The registration rights granted
hereunder may not be assigned or otherwise transferred, without the prior
written consent of the Company.
5. TERMINATION OF REGISTRATION RIGHTS. The Piggyback Registration
rights granted pursuant to paragraph 2(a) shall terminate two (2) years from the
date hereof. The registration rights granted pursuant to Section 2(b) of this
Agreement shall terminate and be of no force and effect as to the Stockholder
and any subsequent transferee upon the earlier to occur of (i) the effective
date of a registration statement filed upon the demand of the Stockholder
pursuant to paragraph 2(b), or (ii) the expiration of two (2) years from the
date of this Agreement.
6. "MARKET STANDOFF" AGREEMENT. The Stockholder agrees that, if
requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, it will not sell or otherwise transfer or dispose of
any Common Stock (or other securities) of the Company held by the Stockholder
during the period beginning seven (7) days prior to and ending 180 days
following the date of the final prospectus of the Company filed under the Act,
provided that such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the Common Stock (or other securities) subject to the foregoing
restriction until the end of said 180 day period.
7. MODIFICATION AND WAIVER. The parties may amend, modify or supplement
this Agreement only by the written agreement of each party hereto. The failure
of any party at any time or times to require performance of any provision hereof
shall in no manner affect such party's right at a later date to enforce the
same. No waiver by any party of a breach of this Agreement, whether by conduct
or otherwise, in any one or more instances shall be, or shall be deemed to be, a
further or continuing waiver of such breach or a waiver of any condition or of
any other breach of this Agreement.
8. NOTICES. Any notices or other communications required or permitted
hereunder shall be deemed to have been duly given when delivered personally or
sent by registered or certified mail, postage prepaid (return receipt
requested), to the party to whom such notice or communication is addressed at
the following addresses (or at such other address for a party as shall be
specified by like notice):
To the Stockholder: MAROON BELLS CAPITAL PARTNERS, INC.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
To the Company: #00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: President
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56262.2
With a copy to: Xxxxxxx X. Xxxxx, Esq.
XXXXX & XXXXXX
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
9. GENDER AND NUMBER, ETC. All words or terms used in this Agreement,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.
"Hereof," "herein," and "hereunder" and words of similar import shall be
construed to refer to this Agreement as a whole, and not to any particular
paragraph or provisions, unless expressly so stated.
10. SUCCESSORS AND ASSIGNS. All rights hereunder may be assigned or
otherwise conveyed to any permitted transferee or assignee. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
12. ENTIRE AGREEMENT AND CAPTIONS. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior agreements,
arrangements and communications, whether oral or written, between or among the
parties with respect to the subject matter hereof. Captions appearing in this
Agreement are for convenience of reference only and shall not be deemed to
explain, limit or amplify the provisions hereof.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah.
14. SEVERABILITY. If any provisions contained in this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not invalidate the entire
Agreement. Such provision shall be deemed to be modified to the extent necessary
to render it valid and enforceable and if no such modification shall render it
valid and enforceable then the Agreement shall be construed as if not containing
such provision.
15. NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied
is intended to confer upon any person, other than the parties hereto or their
respective permitted assigns, successors, heirs and legal representatives, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
16. NO PARTNERSHIP OR JOINT VENTURE. Notwithstanding anything to the
contrary contained herein, nothing contained herein shall be construed as
creating a partnership or joint venture relationship between the parties hereto,
and the parties hereto shall be deemed to
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56262.2
have made any elections necessary under any applicable law, rule or regulation
to prevent their being considered or deemed to be a partnership or joint
venture.
17. NO IMPAIRMENT. The Company will not take any action, or fail to
take any action, avoid or seem to avoid the observance or performance of any of
the terms to be performed by the Company hereunder and the Company will at all
times act in good faith to assist the Stockholder in the carrying out of the
provisions of this Agreement as may be necessary to preserve and protect the
registration rights of the Stockholder under this Agreement.
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56262.2
THE COMPANY:
SAGE RESOURCES, INC.
By: __________________________________
Its: ___________________________________
THE STOCKHOLDER:
MAROON BELLS CAPITAL PARTNERS, INC.
By: __________________________________
Its: ___________________________________
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56262.2
