Exhibit 10.1


 


REGISTRATION RIGHTS AGREEMENT


 


PELICAN FINANCIAL, INC. 

(a Delaware Corporation)


 


 


THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”) is made as of the 15th
day of December, 2005, by and between Pelican Financial, Inc. a Delaware
corporation (the “Company”), and Stark Bank Group, Ltd. (“Shareholder”).


 


RECITALS


 


WHEREAS, Shareholder (the “Investor”) has purchased shares of the
Series A Preferred Stock of the Company (the “Series A Preferred Stock”) in a
private placement offering of the Series A Preferred Stock by the Company (the
“Private Placement”); and


 


WHEREAS, the terms of the Series A Preferred Stock and of the Private
Placement provide, among other things, that the Company and each Investor shall
enter into this Agreement to provide for certain arrangements with respect to
the registration of the shares of the Common Stock of the Company which are
issuable upon a conversion of the shares of the Series A Preferred Stock in
accordance with the conversion terms of the Series A Preferred Stock; and


 


WHEREAS, the Company and Shareholder accordingly desire to enter into
this Agreement, all upon the terms and conditions set forth herein.


 


NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agrees as follows:


 


1.             Registration
Rights.  The Company and Shareholder
covenant and agree as follows:


 


1.1           Definitions.  For purposes of this Paragraph 1:


 


(a)           The
terms “register”, “registered”, and “registration” each refer to a registration
effected by preparing and filing a registration statement under the Securities
Act and the declaration or ordering of effectiveness of such registration
statement by the SEC.


 


(b)           The
term “Registrable Securities” means the shares of the Common Stock of the
Company issued or issuable upon a conversion of the shares of the Series A
Preferred Stock (the “Series A Preferred Stock”) in accordance with the terms
of the Series A Preferred Stock, excluding in all cases, however, any
Registrable Securities which have been previously sold by a person or entity in
a transaction in which such person’s or entity’s rights under this Section 1
are not assigned or pursuant to an effective registration statement or pursuant
to an exemption from the registration requirements 


 





















 


under the Securities Act and any Registrable Securities that are
eligible for sale pursuant to Rule 144(k) promulgated under the Securities Act
of 1933.


 


(c)           The
term “Holder” means any person or entity owning or having the right to acquire
Registrable Securities or any permitted assignee thereof in accordance with
Section 1.10 hereof.


 


(d)           The
term “Form S-3” means such form under the Securities Act as in effect on the
date hereof or any other registration form under the Securities Act which
permits inclusion or incorporation of substantial information by reference to
other documents previously filed by the Company with the SEC.


 


(e)           The
term “Securities Act” means the United States Securities Act of 1933, as
amended.


 


(f)            The
term “SEC” means the United States Securities and Exchange Commission.


 


1.2.          Company
Demand and Piggy Back Registration.


 


(a)           Demand Registration.


 


                                (i)            Holders
shall be entitled to one demand registration right (a “Demand Registration”)
under the 1933 Act covering all or part of the Registrable Securities as
Holders may request, commencing on or after October 1, 2006, provided, however,
that Holders may exercise such right only in the event that they shall have
converted all their Series A Preferred Stock into Common Stock.  Any such registration right shall be
exercised by a majority of the Holders consenting to and giving notice thereof
to the Company.  Upon receipt of such
notice the Company shall, (i) promptly give written notice of the proposed
registration to all Holders; and (ii) as expeditiously as possible, prepare and
file a registration statement covering the number of Registrable Securities
requested by the Holders, together with all or such portion of Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within Twenty (20) days after receipt
of such written notice from the Company and shall use its reasonable efforts to
cause such registration statement to become effective and remain open for a
period not to less than one hundred twenty (120) days.  The Company shall be required to effect only
one Demand Registration on behalf of all of the Holders.


 


                                                                (ii)           In the event (i) Holders shall determine for any reason
not to proceed with a registration at any time before the registration
statement has been declared effective by the SEC, (ii) such registration
statement is thereafter withdrawn with respect to the Registrable Securities,
and (iii) Holders shall agree to bear its own expenses incurred in connection
therewith and to reimburse the Company for such expenses incurred by the
Company attributable to the registration of the 
Registrable Securities, Holders shall not 


 


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                                                be deemed to
have exercised a right to require the Company to register the Shares pursuant
to this Section at the expense of the Company.


 


(b)           Piggy-Back
Registration.  If at any time after
October 1, 2006, the Company proposes to file a registration statement
under the Securities Act with respect to an offering by the Company for its own
account or for the account of any of its securityholders (a “Selling Securityholder”)
of any class of equity security (other than (i) a registration statement on
Form S-4 or S-8 (or any substitute form that may be adopted by the
SEC) or (ii) a registration statement filed in connection with an exchange
offer or offering of securities solely to the Company’s existing
securityholders), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event less than 20 days before the anticipated filing date), and such notice
shall offer such Holders the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (which request shall
specify the Registrable Securities intended to be disposed of by such Holder
and the intended method of distribution thereof) (a “Piggy-Back Registration”);
provided, however, that Holders may exercise such right only in the event that
they shall have converted all their Series A Preferred Stock into Common Stock.  The Company shall use its reasonable best
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration to be included on the same terms
and conditions as those of the Selling Securityholder or the Company, as the
case may be, and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. Any
Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement pursuant to this Section
2(b) by giving written notice to the Company of its request to withdraw prior
to the effective date of such registration statement.  The Company may withdraw a Piggy-Back
Registration at any time prior to the time it becomes effective, provided that
the Company shall give prompt notice thereof to participant Holders and shall
reimburse Holders of Registrable Securities requested to be included in such
Piggy-Back Registration of all reasonable out-of-pocket expenses
(including counsel fees and expenses) incurred prior to such withdrawal.


 


(c)           Anything in this
Agreement to the contrary notwithstanding, the Company shall not be required to
register any Registrable Securities (and shall be entitled to suspend the
availability of any registration statement and prospectus then in effect) for a
period of up to 180 days after it issues the Holders a notice (“Deferral
Notice”) that there exists a pending corporate development that, in the
reasonable discretion of the Board of Directors, makes it appropriate to
suspend the filing or availability of such registration statement and related
prospectus.


 


1.3.          Obligations of
the Company.  Whenever required under
this Paragraph 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:


 


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(a)           Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best 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 one hundred twenty (120) days for
the purpose of attempting to sell all of the Common Stock which was registered
with the SEC under the registration statement.


 


(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.


 


(c)           Furnish
to a Holder such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by that Holder.


 


(d)           Use
its reasonable best efforts to register and qualify the Common Stock covered by
such registration statement under such other securities or Blue Sky laws of
such states in the United States as shall be reasonably requested by the
Holders of a majority of the Registrable Securities registered thereunder,
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.


 


(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. 
Each Holder participating in the offering shall also enter into and
perform is obligations under such underwriting agreement, as provided in
Section 1.6 hereof


 


(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, of 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 (in which event
the Holders agree to suspend their sales under the registration statement and
prospectus until notified by the Company that it has filed an amendment to the
registration statement or prospectus supplement to correct such untrue
statement or omission).


 


1.4.          Furnish
Information.  It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Paragraph 1 with respect to the Registrable Securities of any selling Holder
that such Holder shall furnish the Company with all such information regarding
the Holder, the Registrable Securities held by the Holder, and the intended
method of disposition of such securities as shall be necessary or appropriate
to effect the registration of such Holder’s Registrable Securities.


 


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1.5.          Expenses of
Company Registration.  Except as
provided below in this Section 1.5, the Company shall bear and pay all expenses
incurred in connection with any registration of Registrable Securities pursuant
to Section 1.2 hereof for each Holder, including, without limitation, all
registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto and the fees and disbursements of one legal
counsel for the selling Holders selected by the Holders of a majority of the
Registrable Securities which are being registered (provided, that the Company
shall not be required to pay more than $5,000 in the aggregate under this
Agreement for all such counsel fees and expenses), but excluding, however,
underwriting discounts and commissions relating to Registrable Securities
(which shall be paid by the Holders).


 


1.6.          Underwriting
Requirements.  In connection with any
offering involving an underwriting of shares of the Company’s Common Stock, the
Company shall not be required under Section 1.2 to include any holder’s
Registrable Securities in such underwriting unless the Holder accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by the Company, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of shares of Registrable
Securities and of the Common Stock to be sold by other shareholders in such
offering exceeds the amount that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such shares
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (with the number of shares as so determined by the
underwriters to be apportioned pro rata among the respective Holders and other
selling shareholders according to the total amount of shares entitled to be
included therein by each such respective Holder and other selling shareholder).
For purposes of the preceding parenthetical concerning apportionment of shares
among Holders and other selling shareholders, in apportioning shares to a
Holder which is a partnership or corporation, the partners, retired partners
and shareholders of such Holder, or the estates and family members of any such
partners, retired partners or shareholders, and any trusts for the benefit of
any of the foregoing described persons or entities shall be deemed to be a
single “Holder”, and any pro rata reduction with respect to such “Holder” shall
be based upon the aggregate amount of shares of Registrable Securities owned by
all persons and entities included in such “Holder”, as defined in this
sentence.


 


1.7.          No Delay of
Registration.  No Holder shall have
any right to obtain or seek any injunction restraining or otherwise delaying
any registration as a result of any controversy that might arise with respect
to the interpretation or implementation of this Agreement.


 


1.8.          Indemnification.
 In the event any Registrable Securities
are included in a registration statement under this Paragraph 1:


 


(a)           To
the extent permitted by law the Company will indemnify and hold harmless each
Holder, and each person or entity, if any, who or which controls such Holder
within the meaning of the Securities Act or the United States Securities
Exchange Act of 1934, as amended (the “1934 Act”), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the 1934 Act or other federal or state law, but only
insofar as such losses, claims, damages, or 


 


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liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively, a
“Violation”): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including in any
preliminary prospectus or final prospectus contained therein or in any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be started therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law; and the Company will pay to each such
Holder, or controlling person or entity, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any case or in any respect whatsoever for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based in any way
upon a Violation which occurs in reliance upon and in conformity with any
written information furnished expressly for use in connection with such registration
by such Holder or any controlling person of such Holder.


 


(b)           To
the extent permitted by law, each selling Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person or entity, if any, who or which
controls the Company within the meaning of the Securities Act or the 1934 Act,
any underwriter, any other Holder selling securities under such registration
statement, and any person or entity who or which controls any such underwriter
or other Holder within the meaning of the Securities Act or the 1934 Act,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons or entities may become subject, under the Securities
Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are in any way based on reliance upon and in conformity with any written
information furnished for use in connection with such registration by such
Holder or any controlling person or entity of such Holder; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person or entity to be indemnified pursuant to this subsection 1.08(b) in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.08(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; and provided that in no event shall any indemnity under this
subsection 1.08(b) exceed the gross proceeds received by such Holder from the
sale of the Holder’s Registrable Securities in the offering.


 


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(c)           Promptly
after receipt by an indemnified party under this Section 1.08 of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1.08, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, assume
the defense thereof with counsel mutually satisfactory to the indemnifying
party and the indemnified party; provided, however, 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 and the indemnifying party by the
counsel retained by the indemnifying party would be inappropriate, in the view
of such counsel, under applicable legal ethical standards due to actual or
potential differing interests between the indemnified party and the
indemnifying party or any other indemnified parties. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to the indemnifying party’s
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.08, but the omission to
deliver written notice to the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party
otherwise than under this Section 1.08.


 


(d)           If
the indemnification provided for in this Section 1.08 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, liability, claim, damage, action, or expense, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, action or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and of the indemnified party, on the other, in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, action or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the statement or omission relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.


 


(e)           Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with an underwritten public offering are in conflict with this Section 1.08,
the provisions in the underwriting agreement shall control to the full extent
of such inconsistency.


 


(f)            The
obligations of the Company and the Holders under this Section 1.08 shall
survive the completion of any offering of Registrable Securities under a
registration statement under this Paragraph 1, and otherwise.


 


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1.9.          Reports Under
Securities Exchange Act of 1934.  With
a view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may
at any time permit a Holder to sell shares of the Common Stock of the Company
to the public without registration or pursuant to a registration on SEC Form
S-3, the Company agrees to:


 


(a)           make
and keep public information available, as those terms are understood and
defined in SEC Rule 144, at all times after ninety (90) days after the
effective date of the initial public offering filed by the Company for the
offering of its Common Stock to the general public; provided, however, that the
Company has no obligation to make such initial public offering;


 


(b)           take
such action as is reasonably necessary to enable the Holders to utilize SEC
Form S-3 for the sale of their Registrable Securities; and


 


(c)           file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the 1934 Act;


 


provided,
however, that the Company shall not be deemed to be in breach of this Section
in the event that it is unable to file any report with the SEC because of any
unresolved accounting issue.


 


1.10.        Assignment of
Registration Rights.  The rights of a
Holder under this Agreement may be assigned (but only with all related
obligations) by the Holder to an affiliate (as defined in Rule 144 promulgated
under the Securities Act) of the Holder to whom all of the Registrable
Securities of the Holder have been transferred; provided the Company is within
a reasonable time after such transfer or assignment, furnished with written
notice of the name and address of such transferee or assignee and the
Registrable Securities with respect to which such rights and obligations are
being assigned; and provided, further, that such transfer or assignment shall
be effective only if immediately following such transfer or assignment the
further disposition of such Registrable Securities by the transferee or
assignee is restricted under the Securities Act.


 


1.11.        “Market
Stand-Off” Agreement.  Shareholder
hereby agrees that, during the period of duration specified by the Company and
an underwriter of the Company (such period not to exceed 180 days), following
the effective date of a registration statement of the Company filed under the
Securities Act with respect to the Common Stock or other securities of the
Company, Shareholder 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
or otherwise transfer or dispose of (other than to donees who agree to be
similarly bound) any Registrable Securities of the Company held by Shareholder
at any time during such period, except only shares of Common Stock of the
Company held by the Shareholder and which are included in such registration
statement; provided however, that all executive officers and directors of the
Company and all other persons or entities with 


 


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registration rights (whether or not pursuant to this Agreement) are
required by the underwriter to enter into similar agreements.


 


In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to the Registrable Securities held by
Shareholder (and the shares or securities of every other person or entity
subject to the foregoing restriction) until the end of such period.


 


1.12.        Termination of
Registration Rights.  No Holder shall
be entitled to exercise or shall otherwise have any rights provided for in this
Paragraph 1 after December 31, 2015.


 


2.             Miscellaneous.


 


2.1.          Successors and
Assigns.  Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including transferees or assignees of the Series A Preferred Stock or
the Registrable Securities).


 


2.2.          Governing Law.
 This Agreement shall be governed by and
construed under the laws of the State of Iowa, but without regard to provisions
thereof relating to conflicts of law.


 


2.3.          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


2.4.          Titles and
Subtitles.  The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.


 


2.5.          Notices.  Unless otherwise provided herein, any notice
required or permitted to be given under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereto,
or at such either address as such party may designate by ten (10) days advance
written notice to the other party.


 


2.6.          Amendments and
Waivers.  Any term of this Agreement
may be amended and the observance of any term or this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
a majority of the Series A Preferred Stock and Registrable Securities then
outstanding, except that this Agreement may be amended to include as parties
hereto all holders of Common Stock of the Company on the date hereof (the
“Common Holders”) by a written instrument executed by the Company and each
Common Holder electing to be included as a party hereto. Any amendment or
waiver effected in accordance with this Section 2.6 shall be binding upon each
Holder of any Registrable Securities then outstanding, each future holder of
all such Registrable Securities, and the Company.


 


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2.7.          Severability.
 If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable is
accordance with its terms.


 


2.8.          Entire Agreement.
 This Agreement (including the Exhibits
hereto, if any) constitutes the full and entire understanding and agreement
between the parties with regard to the subject matters hereof and thereof.


 


 


(remainder of page intentionally left blank)


 


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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.


 


Pelican
Financial, Inc.


 


 


	
  By:

  	
  /s/
  Charles C. Huffman

  	
   

  
	
   

  	
  Charles
  C. Huffman

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  Pelican
  Financial, Inc.

  
	
   

  	
   

  	
  3767
  Ranchero Drive

  
	
   

  	
   

  	
  Ann
  Arbor, MI 48108

  
	
   

  	
   

  	
  Attention:
  Charles C. Huffman, Chief Executive Officer

  
	
   

  
	
  SHAREHOLDER

  
	
  Stark
  Bank Group, Ltd.

  
	
   

  
	
   

  
	
  /s/
  Thomas G. Schnurr

  	
   

  
	
  [Type
  or Print Name] Thomas G. Schnurr

  
				



 


Print
Title: Chief Executive Officer


 


Address:
Stark Bank Group Ltd.


1207
Central Avenue


P.
O. Box 798


Fort
Dodge, IA  50501


Attention:  Thomas G. Schnurr 


 


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