EXHIBIT 10.7
SECOND AMENDED AND
RESTATED
REGISTRATION RIGHTS
AGREEMENT
This Second Amended and Restated
Registration Rights Agreement (as amended, this “
Agreement ”) is made as of December 28,
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 dated July 7, 2005, among the Company and
certain Purchasers (as defined therein) (the “ July
Securities Purchase Agreement ”); (iv) that
certain Securities Purchase Agreement dated December 28, 2005,
among the Company and certain Purchasers (as defined therein) (the
“ Securities Purchase Agreement ”) and
(v) 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
(vi) 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 July Securities Purchase
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
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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. 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
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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.
(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
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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.
(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 lis
