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Exhibit
10.2
REGISTRATION RIGHTS
AGREEMENT
This Registration Rights
Agreement (the “ Agreement
” ) is made as of February 22, 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 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 of even date herewith
by and among Avalanche Resources, Ltd. and the Purchasers named
therein (the “ Stock Purchase Agreemen t
” ) or (ii) that certain Exchange Agreement of even
date herewith by and between the Company and Sponsor Investments,
LLC (the “ Exchange Agreement
” ); and
WHEREAS, in order to induce
the Stockholders or their affiliates to enter into the Stock
Purchase Agreement or the Exchange 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 premises and the mutual agreements herein
contained, the Stockholders and the Company hereby agree as
follows:
1. Demand
Registrations .
(a) Requests for
Registration . At any time, 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 .” 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. 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 four Long-Form Registrations in which the Company shall pay
all Registration Expenses (the “ Company-Paid Long-Form
Registrations ”); provided, however, that each of the
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Group and the Sponsor Group shall be
limited to two 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 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.
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(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 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.
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(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;
(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;
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(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;
(j) otherwise use its best
efforts to comply with all applicable rules and regulations of the
Securities and Exchange Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning
with the first day of the Company’s first full calendar
quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder; and
(k) in the event of the
issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing
the use of any related prospectus or suspending the qualification
of any common stock in
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