Exhibit 10.7
AMENDED AND
RESTATED
REGISTRATION RIGHTS
AGREEMENT
This Amended and Restated
Registration Rights Agreement (as amended, this “
Agreement ”) is made as of July 7, 2005, among
North American Technologies Group, Inc., a Delaware corporation
(the “ Company ”), and the stockholders
listed on Exhibit A hereto (each individually a “
Stockholder ” and collectively the “
Stockholders ”).
RECITALS
WHEREAS, the Stockholders or their
affiliates have acquired or will acquire either shares of the
Company’s common stock, par value $.001 per share (the
“ Common Stock ”), or securities
convertible into shares of the Common Stock pursuant to either (i)
that certain Common Stock Purchase Agreement dated as of November
8, 2004, by and among Avalanche Resources, Ltd. and the Purchasers
named therein (the “ Stock Purchase Agreemen
t”); (ii) that certain Exchange Agreement dated as of
November 8, 2004, by and between the Company and Sponsor
Investments, LLC (the “ Exchange Agreement
”); (iii) that certain Securities Purchase Agreement of even
date herewith, among the Company and certain Purchasers (as defined
therein) (the “ Securities Purchase Agreement
”); and (iv) those certain Loan Documents as such term is
defined in that certain Construction Loan Agreement dated as of
February 5, 2004, as amended from time to time, among the Company,
Tietek LLC, Tietek Technologies, Inc. and Opus 5949 LLC (the
“ Opus Loan Agreement ”); and (v) as the
same may be amended from time to time; and
WHEREAS, in order to induce the
Stockholders or their affiliates to enter into the Stock Purchase
Agreement, the Exchange Agreement, the Securities Purchase
Agreement or the Opus Loan Agreement, as the case may be, the
Company has agreed to provide the Stockholders with certain rights
to register Shares of the Company’s Common Stock, as provided
herein.
AGREEMENT
NOW, THEREFORE, in consideration of
the promises and the mutual agreements herein contained, the
Stockholders and the Company hereby agree as follows:
1. Demand Registrations
.
(a) Requests for Registration
. The Initiating Holders may request registration under the
Securities Act of all or any portion of their Registrable
Securities on Form S-1 or any similar long-form registration
(“ Long-Form Registrations ”), and any
Holders may request registration under the Securities Act of all or
any portion of their Registrable Securities on Form S-2 or S-3 or
any similar short-form registration (“ Short-Form
Registrations ”) if the Company is eligible to use
any such short-form. All registrations requested pursuant to this
Section 1(a) are referred to herein as “ Demand
Registrations .” The Initiating Holders and any
Holders may request a Demand Registration no earlier than one (1)
year from the date of this Agreement. Each request for a Demand
Registration shall specify the approximate number of Registrable
Securities requested to be registered and the anticipated per share
price range for such offering.
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Within ten days after receipt of any such
request, the Company shall give written notice of such requested
registration to all other holders of Registrable Securities and,
subject to Section 1(d) below, shall include in such registration
all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days
after the receipt of the Company’s notice.
(b) Long-Form Registrations .
The Initiating Holders shall be entitled to request six (6)
Long-Form Registrations in which the Company shall pay all
Registration Expenses (the “ Company-Paid Long-Form
Registrations ”); provided , however ,
that each of the Group A and the Group B shall be limited to three
(3) such requests which do not include a member of the other as one
of the Initiating Holders. Any sales by the Initiating Holders
pursuant to a registration statement that has been filed with the
Commission but that has not been declared effective as of the date
hereof shall count as one of the permitted Long-Form Registrations.
A registration shall not count as one of the permitted Long-Form
Registrations until it has become effective and the holders of
Registrable Securities initially requesting the Long-Form
Registration are able to register and sell at least 90% of the
Registrable Securities requested to be included in such
registration by such holders; provided that in any
event the Company shall pay all Registration Expenses in connection
with any registration initiated as a Long-Form Registration whether
or not it has become effective and whether or not the holders of
Registrable Securities have been able to register and sell at least
90% of the Registrable Securities to be included in such
registration by such holders. All Long-Form Registrations shall be
underwritten registrations.
(c) Short-Form Registrations
. In addition to the Long-Form Registrations provided pursuant to
Section 1(b), the Holders shall be entitled to request unlimited
Short-Form Registrations in which the Company shall pay all
Registration Expenses provided, however, that Shares representing
at least 15% of the Company’s issued and outstanding Common
Stock will be included in such registration. Demand Registrations
shall be Short-Form Registrations whenever the Company is eligible
to use any applicable short form. The Company shall use its best
efforts to qualify and/or maintain qualification for registration
on Form S-3 or any comparable or successor form.
(d) Priority on Demand
Registrations . The Company shall not include in any Demand
Registration any securities which are not Registrable Securities
without the prior written consent of the Holders owning more than
50% of the Registrable Securities being requested to be registered.
If a Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their
opinion the number of Registrable Securities and, if permitted
hereunder other securities requested to be included in such
offering, exceeds the number of Registrable Securities and other
securities, if any, which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders owning more
than 50% of the Registrable Securities being requested to be
registered, then the Company shall include in such registration
before the inclusion of any securities which are not Registrable
Securities (other than securities requested to be included in such
registration pursuant to contractual obligations with the Company)
the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold in an orderly
manner within the price range of such
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offering, pro rata among the respective holders
thereof on the basis of the amount of Registrable Securities owned
by each such holder. Any Persons other than holders of Registrable
Securities who participate in Demand Registrations which are not at
the Company’s expense must pay their share of the
Registration Expenses as provided in Section 4 hereof.
(e) Selection of Underwriters
. The selection of investment banker(s) and manager(s) for any
Demand Registration must be approved by the Holders owning more
than 50% of the Registrable Securities being requested to be
registered.
(f) Other Registration Rights
. Except as provided in this Agreement, the Company shall not grant
to any Persons the right to request the Company to register any
equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the
prior written consent of Holders owning more than 50% of the
Registrable Securities; provided that the Company may
grant rights to other Persons to participate in Piggyback
Registrations so long as such rights are subordinate to the rights
of the holders of Registrable Securities with respect to such
Piggyback Registrations.
2. Piggyback Registrations
.
(a) Right to Piggyback .
Whenever the Company proposes to register any of its securities
under the Securities Act (other than pursuant to a Demand
Registration or any registration on Form S-4 or Form S-8) and the
registration form to be used may be used for the registration of
Registrable Securities (a “ Piggyback
Registration ”), the Company shall give prompt
written notice to all Holders of Registrable Securities of its
intention to effect such a registration and, subject to Sections
2(c) and 2(d) below, shall include in such registration all
Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 20 days
after the receipt of the Company’s notice.
(b) Piggyback Expenses . The
Registration Expenses of the holders of Registrable Securities
shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary
Registrations . If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the
Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such
registration and other securities requested in such registration
pursuant to contractual obligations with the Company, pro rata
among the holders of such Registrable Securities and other
securities on the basis of the number of shares owned by each such
holder, and (iii) third, other securities requested to be included
in such registration.
(d) Priority on Secondary
Registrations . If a Piggyback Registration is an underwritten
secondary registration on behalf of holders of the Company’s
securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be
sold in
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such offering without adversely affecting the
marketability of the offering, the Company shall include in such
registration (i) first, the securities requested to be included
therein by the holders requesting such registration, the
Registrable Securities requested to be included in such
registration and other securities requested to be included in such
registration pursuant to contractual obligations with the Company,
pro rata among the holders of such securities on the basis of the
number of securities owned by each such holder and (ii) other
securities requested to be included in such
registration.
(e) Other Registrations . If
the Company has previously filed a registration statement with
respect to Registrable Securities pursuant to Section 1 or
Registrable Securities pursuant to this Section 2, and if such
previous registration has not been withdrawn or abandoned, the
Company shall not file or cause to be effected any other
registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any
successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least 90
days has elapsed from the effective date of such previous
registration.
3. Registration Procedures .
Whenever the holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to this
Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in
accordance with the terms of this Agreement and the intended method
of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:
(a) prepare and file with the
Securities and Exchange Commission a registration statement with
respect to such Registrable Securities and use its best efforts to
cause such registration statement to become effective;
provided that before filing a registration statement
or prospectus or any amendments or supplements thereto, the Company
shall, if requested, furnish to the counsel selected by the
Initiating Holders in the event of a Company-Paid Long-Form
Registration or by Holders owning more than 50% of the Registrable
Securities prepared to be registered under any other registration
hereunder, copies of all such documents proposed to be filed
(excluding exhibits);
(b) notify each holder of
Registrable Securities of the effectiveness of each registration
statement filed hereunder and prepare and file with the Securities
and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not less than 180 days and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
registration statement;
(c) furnish to each seller of
Registrable Securities such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary
prospectus), and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
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(d) use its best efforts to register
or qualify such Registrable Securities under such other securities
or blue sky laws of such jurisdictions as any seller reasonably
requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided that the
Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction, or (iii) consent to general
service of process in any such jurisdiction;
(e) notify each seller of such
Registrable Securities, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make
the statements therein not misleading, and, at the request of the
holders of a majority of the sellers of such Registrable
Securities, the Company shall prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus shall not contain
an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(f) cause all such Registrable
Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed and, if
not so listed, to be listed on the NASD automated quotation system
and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ “national
market system security” within the meaning of Rule 11Aa2-1 of
the Securities and Exchange Commission or, failing that, to secure
NASDAQ authorization for such Registrable Securities;
(g) provide a transfer agent and
registrar for all such Registrable Securities not later than the
effective date of such registration statement;
(h) enter into such customary
agreements (including underwriting agreements in customary form) as
the holders of a majority of the Registrable Securities being sold
and the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable
Securities;
(i) make available for inspection by
any seller of Registrable Securities, any underwriter participating
in any disposition pursuant to such registration statement and any
attorney, accountant, or other agent retained by any such seller or
underwriter, all information reasonably requested by any such
seller, underwriter, attorney, accountant, or agent, so as to
permit such Persons to comply with their respective due diligence
obligations under the Securities Act;
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(j) otherwise use its best efforts
to c
