Document:

Exhibit 10.2 Registration Rights Agreement

    REGISTRATION
      RIGHTS AGREEMENT

    

    Registration
      Rights Agreement (the “Agreement”),
      dated
      as of September 18, 2006, by and between The Blackhawk Fund, a corporation
      organized under the laws of State of Nevada, with its principal executive office
      at 1802 N. Carson Street, Suite 212-3018, Carson City, NV 89701 (the
“Company”),
      and
      Dutchess Private Equities Fund, II, LP, a Delaware limited partnership with
      its
      principal office at 50 Commonwealth Avenue, Suite 2, Boston, MA 02116 (the
      “Holder”).

    

    Whereas, in
      connection with the Investment Agreement by and between the Company and the
      Investor of this date (the “Investment
      Agreement”),
      the
      Company has agreed to issue and sell to the Investor an indeterminate number
      of
      shares of the Company’s Common Stock, $.001par value per share (the
“Common
      Stock”),
      to be
      purchased pursuant to the terms and subject to the conditions set forth in
      the
      Investment Agreement; and 

    

    Whereas, to
      induce
      the Investor to execute and deliver the Investment Agreement, the Company has
      agreed to provide certain registration rights under the Securities Act of 1933,
      as amended, and the rules and regulations thereunder, or any similar successor
      statute (collectively, the “1933
      Act”),
      and
      applicable state securities laws, with respect to the shares of Common Stock
      issuable pursuant to the Investment Agreement.

    

    Now
      therefore, in consideration of the foregoing promises and the mutual covenants
      contained hereinafter and other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the Company and the Investor
      hereby agree as follows: 

     

    

    Section
      1. DEFINITIONS.

    

    As
      used
      in this Agreement, the following terms shall have the following
      meanings:

    

    “Execution
      Date”
means
      the date of this Agreement set forth above.

    

    “Investor”
means
      Dutchess Private Equities Fund, II, LP, a Delaware limited
      partnership.

    

    “Person”
means
      a
      corporation, a limited liability company, an association, a partnership, an
      organization, a business, an individual, a governmental or political subdivision
      thereof or a governmental agency. 

    

    “Potential
      Material Event”
means
      any of the following: (i)
      the
      possession by the Company of material information not ripe for disclosure in
      the
      Registration Statement, which shall be evidenced by determinations in good
      faith
      by the Board of Directors of the Company that disclosure of such information
      in
      the Registration Statement would be detrimental to the business and affairs
      of
      the Company, or (ii)
      any
      material engagement or activity by the Company which would, in the good faith
      determination of the Board of Directors of the Company, be adversely affected
      by
      disclosure in the Registration Statement at such time, which determination
      shall
      be accompanied by a good faith determination by the Board of Directors of the
      Company that the Registration Statement would be materially misleading absent
      the inclusion of such information.

    

    “Principal
      Market”
shall
      mean The American Stock Exchange, National Association of Securities Dealer’s,
      Inc., Over-the-Counter electronic bulletin board, the Nasdaq National Market
      or
      The Nasdaq SmallCap Market whichever is the principal market on which the Common
      Stock of the Company is listed. 

     

    “Register,”
      “Registered,”
and
      “Registration”
refer
      to the Registration effected by preparing and filing one (1) or more
      Registration Statements in compliance with the 1933 Act and pursuant to Rule
      415
      under the 1933 Act or any successor rule providing for offering securities
      on a
      continuous basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such Registration Statement(s)
      by the United States Securities and Exchange Commission (the
“SEC”).

    

    “Registrable
      Securities”
means
      (i)
      the
      shares of Common Stock issued or issuable pursuant to the Investment Agreement,
      and (ii)
      any
      shares of capital stock issued or issuable with respect to such shares of Common
      Stock, if any, as a result of any stock split, stock dividend, recapitalization,
      exchange or similar event or otherwise, which have not been (x)
      included
      in the Registration Statement that has been declared effective by the SEC,
      or
(y)
      sold
      under circumstances meeting all of the applicable conditions of Rule 144 (or
      any
      similar provision then in force) under the 1933 Act.

    

    “Registration
      Statement”
means
      the registration statement of the Company filed under the 1933 Act covering
      the
      Registrable Securities.

    

    All
      capitalized terms used in this Agreement and not otherwise defined herein shall
      have the same meaning ascribed to them as in the Investment Agreement.

    

    Section
      2. REGISTRATION.

    

    (a)
      The
      Company shall, within twenty-one (21) days of the date of this Agreement, file
      with the SEC the Registration Statement or Registration Statements (as is
      necessary) on Form SB-2 (or, if such form is unavailable for such a
      registration, on such other form as is available for such registration),
      covering the resale of all of the Registrable Securities, which Registration
      Statement(s) shall state that, in accordance with Rule 416 promulgated under
      the
      1933 Act, such Registration Statement also covers such indeterminate number
      of
      additional shares of Common Stock as may become issuable upon stock splits,
      stock dividends or similar transactions. The Company shall initially register
      for resale ________ shares of Common Stock which would be issuable on the date
      preceding the filing of the Registration Statement based on the closing bid
      price of the Company’s Common Stock on such date and the amount reasonably
      calculated that represents Common Stock issuable to other parties as set forth
      in the Investment Agreement except to the extent that the SEC requires the
      share
      amount to be reduced as a condition of effectiveness.

    

    (b)
      The
      Company shall use all commercially reasonable efforts to have the Registration
      Statement(s) declared effective by the SEC within ninety (90) calendar days
      after the Execution Date. 

    

    (c)
      The
      Company agrees not to include any other securities in the Registration Statement
      covering the Registrable Securities without Investor’s prior written consent
      which Investor may withhold in its sole discretion. Furthermore, the Company
      agrees that it will not file any other Registration Statement for other
      securities, until thirty calendar days after the Registration Statement for
      the
      Registrable Securities is declared effective by the SEC.

    

    Section
      3. RELATED
      OBLIGATIONS.

    

    At
      such
      time as the Company is obligated to prepare and file the Registration Statement
      with the SEC pursuant to Section 2(a), the Company will effect the registration
      of the Registrable Securities in accordance with the intended method of
      disposition thereof and, with respect thereto, the Company shall have the
      following obligations:

    

    

    (a)
      The
      Company shall use all commercially reasonable efforts to cause such Registration
      Statement relating to the Registrable Securities to become effective within
      ninety (90) days after the Execution Date and shall keep such Registration
      Statement effective until the earlier to occur of the date on which (A)
      the
      Investor shall have sold all the Registrable Securities; or (B)
      the
      Investor has no right to acquire any additional shares of Common Stock under
      the
      Investment Agreement (the “Registration
      Period”).
      The
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading. The Company shall use all commercially
      reasonable efforts to respond to all SEC comments within seven (7) business
      days
      from receipt of such comments by the Company. The Company shall use all
      commercially reasonable efforts to cause the Registration Statement relating
      to
      the Registrable Securities to become effective no later than five (5) business
      days after notice from the SEC that the Registration Statement may be declared
      effective. The Investor agrees to provide all information which it is required
      by law to provide to the Company, including the intended method of disposition
      of the Registrable Securities, and the Company’s obligations set forth above
      shall be conditioned on the receipt of such information.

    

    (b)
      The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
      be
      necessary to keep such Registration Statement effective during the Registration
      Period, and, during such period, comply with the provisions of the 1933 Act
      with
      respect to the disposition of all Registrable Securities of the Company covered
      by such Registration Statement until such time as all of such Registrable
      Securities shall have been disposed of in accordance with the intended methods
      of disposition by the Investor thereof as set forth in such Registration
      Statement. In the event the number of shares of Common Stock covered by the
      Registration Statement filed pursuant to this Agreement is at any time
      insufficient to cover all of the Registrable Securities, the Company shall
      amend
      such Registration Statement, or file a new Registration Statement (on the short
      form available therefor, if applicable), or both, so as to cover all of the
      Registrable Securities, in each case, as soon as practicable, but in any event
      within thirty (30) calendar days after the necessity therefor arises (based
      on
      the then Purchase Price of the Common Stock and other relevant factors on which
      the Company reasonably elects to rely), assuming the Company has sufficient
      authorized shares at that time, and if it does not, within thirty (30) calendar
      days after such shares are authorized. The Company shall use commercially
      reasonable efforts to cause such amendment and/or new Registration Statement
      to
      become effective as soon as practicable following the filing thereof.

    

    (c)
      The
      Company shall make available to the Investor whose Registrable Securities are
      included in any Registration Statement and its legal counsel without charge
      (i)
      promptly
      after the same is prepared and filed with the SEC at least one (1) copy of
      such
      Registration Statement and any amendment(s) thereto, including financial
      statements and schedules, all documents incorporated therein by reference and
      all exhibits, the prospectus included in such Registration Statement (including
      each preliminary prospectus) and, with regards to such Registration
      Statement(s), any correspondence by or on behalf of the Company to the SEC
      or
      the staff of the SEC and any correspondence from the SEC or the staff of the
      SEC
      to the Company or its representatives; (ii)
      upon the
      effectiveness of any Registration Statement, the Company shall make available
      copies of the prospectus, via EDGAR, included in such Registration Statement
      and
      all amendments and supplements thereto; and (iii)
      such
      other documents, including copies of any preliminary or final prospectus, as
      the
      Investor may reasonably request from time to time in order to facilitate the
      disposition of the Registrable Securities.

     

    (d)
      The
      Company shall use commercially reasonable efforts to (i)
      register
      and qualify the Registrable Securities covered by the Registration Statement
      under such other securities or “blue sky” laws of such states in the United
      States as the Investor reasonably requests; (ii)
      prepare
      and file in those jurisdictions, such amendments (including post-effective
      amendments) and supplements to such registrations and qualifications as may
      be
      necessary to maintain the effectiveness thereof during the Registration Period;
      (iii)
      take
      such other actions as may be necessary to maintain such registrations and
      qualifications in effect at all times during the Registration Period, and
(iv)
      take all
      other actions reasonably necessary or advisable to qualify the Registrable
      Securities for sale in such jurisdictions; provided,
      however,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to (x)
      qualify
      to do business in any jurisdiction where it would not otherwise be required
      to
      qualify but for this Section 3(d), or (y)
      subject
      itself to general taxation in any such jurisdiction. The Company shall promptly
      notify the Investor who holds Registrable Securities of the receipt by the
      Company of any notification with respect to the suspension of the registration
      or qualification of any of the Registrable Securities for sale under the
      securities or “blue sky” laws of any jurisdiction in the United States or its
      receipt of actual notice of the initiation or threatening of any proceeding
      for
      such purpose.

    

    (e)
      As
      promptly as practicable after becoming aware of such event, the Company shall
      notify Investor in writing of the happening of any event as a result of which
      the prospectus included in the Registration Statement, as then in effect,
      includes an untrue statement of a material fact or omission to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading
      (“Registration
      Default”)
      and
      use all diligent efforts to promptly prepare a supplement or amendment to such
      Registration Statement and take any other necessary steps to cure the
      Registration Default (which, if such Registration Statement is on Form S-3,
      may
      consist of a document to be filed by the Company with the SEC pursuant to
      Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to
      be
      incorporated by reference in the prospectus) to correct such untrue statement
      or
      omission, and make available copies of such supplement or amendment to the
      Investor. The Company shall also promptly notify the Investor (i)
      when a
      prospectus or any prospectus supplement or post-effective amendment has been
      filed, and when the Registration Statement or any post-effective amendment
      has
      become effective (the Company will prepare notification of such effectiveness
      which shall be delivered to the Investor on the same day of such effectiveness
      and by overnight mail), additionally, the Company will promptly provide to
      the
      Investor, a copy of the effectiveness order prepared by the SEC once it is
      received by the Company; (ii)
      of any
      request by the SEC for amendments or supplements to the Registration Statement
      or related prospectus or related information, (iii)
      of
      the
      Company’s reasonable determination that a post-effective amendment to the
      Registration Statement would be appropriate, (iv)
      in the
      event the Registration Statement is no longer effective, or
      (v) if
      the
      Registration Statement is stale as a result of the Company’s failure to timely
      file its financials or otherwise. The Company acknowledges that its failure
      to
      cure the Registration Default within ten (10) business days will cause the
      Investor to suffer damages in an amount that will be difficult to ascertain.
      Accordingly, the parties agree that it is appropriate to include a provision
      for
      liquidated damages. The parties acknowledge and agree that the liquidated
      damages provision set forth in this section represents the parties’ good faith
      effort to quantify such damages and, as such, agree that the form and amount
      of
      such liquidated damages are reasonable and will not constitute a penalty. It
      is
      the intention of the parties that interest payable under any of the terms of
      this Agreement shall not exceed the maximum amount permitted under any
      applicable law. If a law, which applies to this Agreement, which sets the
      maximum interest amount, is finally interpreted so that the interest in
      connection with this Agreement exceeds the permitted limits, then: (1)
      any such
      interest shall be reduced by the amount necessary to reduce the interest to
      the
      permitted limit; and (2)
      any sums
      already collected (if any) from the Company which exceed the permitted limits
      will be refunded to the Company. The Investor may choose to make this refund
      by
      reducing the amount that the Company owes under this Agreement or by making
      a
      direct payment to the Company. If a refund reduces the amount that the Company
      owes the Investor, the reduction will be treated as a partial payment.

    

    (f)
      The
      Company shall use all commercially reasonable efforts to prevent the issuance
      of
      any stop order or other suspension of effectiveness of the Registration
      Statement, or the suspension of the qualification of any of the Registrable
      Securities for sale in any jurisdiction and, if such an order or suspension
      is
      issued, to obtain the withdrawal of such order or suspension at the earliest
      possible moment and to notify the Investor holding Registrable Securities being
      sold of the issuance of such order and the resolution thereof or its receipt
      of
      actual notice of the initiation or threat of any proceeding concerning the
      effectiveness of the registration statement.

    

    (g)
      The
      Company shall permit the Investor and one (1) legal counsel, designated by
      the
      Investor, to review and comment upon the Registration Statement and all
      amendments and supplements thereto at least one (1) calendar day prior to their
      filing with the SEC. 

    However,
      any postponement of a filing of a Registration Statement or any postponement
      of
      a request for acceleration or any postponement of the effective date or
      effectiveness of a Registration Statement by written request of the Investor
      (collectively, the "Investor's Delay") shall not act to trigger any penalty
      of
      any kind, or any cash amount due or any in-kind amount due the Investor from
      the
      Company under any and all agreements of any nature or kind between the Company
      and the Investor. The event(s) of an Investor's Delay shall act to suspend
      all
      obligations of any kind or nature of the Company under any and all agreements
      of
      any nature or kind between the Company and the Investor. 

    

    (h)
      At the
      request of the Investor, the Company's counsel shall furnish to the Investor
      an
      opinion letter confirming the effectiveness of the registration statement.
      Such
      opinion letter shall be issued as of the date of the effectiveness of the
      registration statement and be in form suitable to the Investor.

    

    (i)
      The
      Company shall hold in confidence and not make any disclosure of information
      concerning the Investor unless (i)
      disclosure
      of such information is necessary to comply with federal or state securities
      laws, (ii)
      the
      disclosure of such information is necessary to avoid or correct a misstatement
      or omission in any Registration Statement, (iii)
      the
      release of such information is ordered pursuant to a subpoena or other final,
      non-appealable order from a court or governmental body of competent
      jurisdiction, or (iv)
      such
      information has been made generally available to the public other than by
      disclosure in violation of this Agreement or any other agreement. The Company
      agrees that it shall, upon learning that disclosure of such information
      concerning the Investor is sought in or by a court or governmental body of
      competent jurisdiction or through other means, give prompt written notice to
      the
      Investor and allow the Investor, at the Investor’s expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      covering such information.

    

    (j)
      The
      Company shall use all commercially reasonable efforts to maintain designation
      and quotation of all the Registrable Securities covered by any Registration
      Statement on the Principal Market. If, despite the Company’s commercially
      reasonable efforts, the Company is unsuccessful in satisfying the preceding
      sentence, it shall use commercially reasonable efforts to cause all the
      Registrable Securities covered by any Registration Statement to be listed on
      each other national securities exchange and automated quotation system, if
      any,
      on which securities of the same class or series issued by the Company are then
      listed, if any, if the listing of such Registrable Securities is then permitted
      under the rules of such exchange or system. The Company shall pay all fees
      and
      expenses in connection with satisfying its obligation under this Section
      3(j).

    

    (k)
      The
      Company shall cooperate with the Investor to facilitate the prompt preparation
      and delivery of certificates representing the Registrable Securities to be
      offered pursuant to the Registration Statement and enable such certificates
      to
      be in such denominations or amounts, as the case may be, as the Investor may
      reasonably request (and after any sales of such Registrable Securities by the
      Investor, such certificates not bearing any restrictive legend).

    

    (l)
      The
      Company shall provide a transfer agent for all the Registrable Securities not
      later than the effective date of the first Registration Statement filed pursuant
      hereto.

    

    (m)
      If
      requested by the Investor, the Company shall (i)
      as soon
      as reasonably practical incorporate in a prospectus supplement or post-effective
      amendment such information as the Investor reasonably determines should be
      included therein relating to the sale and distribution of Registrable
      Securities, including, without limitation, information with respect to the
      offering of the Registrable Securities to be sold in such offering; (ii)
      make all
      required filings of such prospectus supplement or post-effective amendment
      as
      soon as reasonably possible after being notified of the matters to be
      incorporated in such prospectus supplement or post-effective amendment; and
      (iii)
      supplement or make amendments to any Registration Statement if reasonably
      requested by the Investor.

    

    (n)
      The
      Company shall use all commercially reasonable efforts to cause the Registrable
      Securities covered by the applicable Registration Statement to be registered
      with or approved by such other governmental agencies or authorities as may
      be
      necessary to facilitate the disposition of such Registrable
      Securities.

     

    (o)
      The
      Company shall otherwise use all commercially reasonable efforts to comply with
      all applicable rules and regulations of the SEC in connection with any
      registration hereunder.

    

    (p)
      Within
      one (1) business day after the Registration Statement which includes Registrable
      Securities is declared effective by the SEC, the Company shall deliver to the
      transfer agent for such Registrable Securities, with copies to the Investor,
      confirmation that such Registration Statement has been declared effective by
      the
      SEC.

    

    (q)
      The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investor of Registrable Securities pursuant to
      the
      Registration Statement.

    

    

    Section
      4. OBLIGATIONS
      OF THE INVESTOR.

     

    (a)
      At least
      five (5) calendar days prior to the first anticipated filing date of the
      Registration Statement the Company shall notify the Investor in writing of
      the
      information the Company requires from the Investor for the Registration
      Statement. It shall be a condition precedent to the obligations of the Company
      to complete the registration pursuant to this Agreement with respect to the
      Registrable Securities and the Investor agrees to furnish to the Company that
      information regarding itself, the Registrable Securities and the intended method
      of disposition of the Registrable Securities as shall reasonably be required
      to
      effect the registration of such Registrable Securities and the Investor shall
      execute such documents in connection with such registration as the Company
      may
      reasonably request. The Investor covenants and agrees that, in connection with
      any sale of Registrable Securities by it pursuant to the Registration Statement,
      it shall comply with the “Plan of Distribution” section of the then current
      prospectus relating to such Registration Statement.

    

    (b)
      The
      Investor, by its acceptance of the Registrable Securities, agrees to cooperate
      with the Company as reasonably requested by the Company in connection with
      the
      preparation and filing of any Registration Statement hereunder, unless the
      Investor has notified the Company in writing of an election to exclude all
      of
      the Investor’s Registrable Securities from such Registration Statement.

    

    (c)
      The
      Investor agrees that, upon receipt of written notice from the Company of the
      happening of any event of the kind described in Section 3(f) or the first
      sentence of 3(e), the Investor will immediately discontinue disposition of
      Registrable Securities pursuant to any Registration Statement(s) covering such
      Registrable Securities until the Investor’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 3(f) or the first
      sentence of 3(e)

    

    Section
      5. EXPENSES
      OF REGISTRATION.

    

    All
      expenses, other than underwriting discounts and commissions and other than
      as
      set forth in the Investment Agreement, incurred in connection with registrations
      including comments, filings or qualifications pursuant to Sections 2 and 3,
      including, without limitation, all registration, listing and qualifications
      fees, printing and accounting fees, and fees and disbursements of counsel for
      the Company or for the Investor shall be paid by the Company.

    

    Section
      6. INDEMNIFICATION.

    

    In
      the
      event any Registrable Securities are included in the Registration Statement
      under this Agreement:

    

    

    (a)
      To the
      fullest extent permitted by law, the Company, under this Agreement, will, and
      hereby does, indemnify, hold harmless and defend the Investor who holds
      Registrable Securities, the directors, officers, partners, employees, counsel,
      agents, representatives of, and each Person, if any, who controls, any Investor
      within the meaning of the 1933 Act or the Securities Exchange Act of 1934,
      as
      amended (the “1934
      Act”)
      (each,
      an “Indemnified
      Person”),
      against any losses, claims, damages, liabilities, judgments, fines, penalties,
      charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint
      or several (collectively, “Claims”),
      incurred in investigating, preparing or defending any action, claim, suit,
      inquiry, proceeding, investigation or appeal taken from the foregoing by or
      before any court or governmental, administrative or other regulatory agency,
      body or the SEC, whether pending or threatened, whether or not an indemnified
      party is or may be a party thereto (“Indemnified
      Damages”),
      to
      which any of them may become subject insofar as such Claims (or actions or
      proceedings, whether commenced or threatened, in respect thereof) arise out
      of
      or are based upon: (i)
      any
      untrue statement or alleged untrue statement of a material fact in the
      Registration Statement or any post-effective amendment thereto or in any filing
      made in connection with the qualification of the offering under the securities
      or other “blue sky” laws of any jurisdiction in which the Investor has requested
      in writing that the Company register or qualify the Shares (“Blue
      Sky Filing”),
      or
      the omission or alleged omission to state a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which the statements therein were made, not misleading,
      (ii)
      any
      untrue statement or alleged untrue statement of a material fact contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading, or (iii)
      any
      violation or alleged violation by the Company of the 1933 Act, the 1934 Act,
      any
      other law, including, without limitation, any state securities law, or any
      rule
      or regulation thereunder relating to the offer or sale of the Registrable
      Securities pursuant to the Registration Statement (the matters in the foregoing
      clauses (i) through (iii) being, collectively, “Violations”).
      Subject to the restrictions set forth in Section 6(c) the Company shall
      reimburse the Investor and each such controlling person, promptly as such
      expenses are incurred and are due and payable, for any reasonable legal fees
      or
      other reasonable expenses incurred by them in connection with investigating
      or
      defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a):
(i)
      shall
      not apply to a Claim arising out of or based upon a Violation which is due
      to
      the inclusion in the Registration Statement of the information furnished to
      the
      Company by any Indemnified Person expressly for use in connection with the
      preparation of the Registration Statement or any such amendment thereof or
      supplement thereto; (ii)
      shall
      not be available to the extent such Claim is based on (a)
      a
      failure of the Investor to deliver or to cause to be delivered the prospectus
      made available by the Company or (b)
      the
      Indemnified Person’s use of an incorrect prospectus despite being promptly
      advised in advance by the Company in writing not to use such incorrect
      prospectus; (iii)
      any
      claims based on the manner of sale of the Registrable Securities by the Investor
      or of the Investor’s failure to register as a dealer under applicable securities
      laws; (iv)
      any
      omission of the Investor to notify the Company of any material fact that should
      be stated in the Registration Statement or prospectus relating to the Investor
      or the manner of sale; and (v)
      any
      amounts paid in settlement of any Claim if such settlement is effected without
      the prior written consent of the Company, which consent shall not be
      unreasonably withheld. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of the Indemnified Person
      and shall survive the resale of the Registrable Securities by the Investor
      pursuant to the Registration Statement.

    

    (b)
      In
      connection with any Registration Statement in which Investor is participating,
      the Investor agrees to severally and jointly indemnify, hold harmless and
      defend, to the same extent and in the same manner as is set forth in Section
      6(a), the Company, each of its directors, each of its officers who signs the
      Registration Statement, each Person, if any, who controls the Company within
      the
      meaning of the 1933 Act or the 1934 Act and the Company’s agents (collectively
      and together with an Indemnified Person, an “Indemnified
      Party”),
      against any Claim or Indemnified Damages to which any of them may become
      subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
      or
      Indemnified Damages arise out of or are based upon any Violation, in each case
      to the extent, and only to the extent, that such Violation is due to the
      inclusion in the Registration Statement of the written information furnished
      to
      the Company by the Investor expressly for use in connection with such
      Registration Statement; and, subject to Section 6(c), the Investor will
      reimburse any legal or other expenses reasonably incurred by them in connection
      with investigating or defending any such Claim; provided,
      however,
      that
      the indemnity agreement contained in this Section 6(b) and the agreement with
      respect to contribution contained in Section 7 shall not apply to amounts paid
      in settlement of any Claim if such settlement is effected without the prior
      written consent of the Investor, which consent shall not be unreasonably
      withheld; provided, further, however, that the Investor shall only be liable
      under this Section 6(b) for that amount of a Claim or Indemnified Damages as
      does not exceed the net proceeds to such Investor as a result of the sale of
      Registrable Securities pursuant to such Registration Statement. Such indemnity
      shall remain in full force and effect regardless of any investigation made
      by or
      on behalf of such Indemnified Party and shall survive the resale of the
      Registrable Securities by the Investor pursuant to the Registration Statement.
      Notwithstanding anything to the contrary contained herein, the indemnification
      agreement contained in this Section 6(b) with respect to any preliminary
      prospectus shall not inure to the benefit of any Indemnified Party if the untrue
      statement or omission of material fact contained in the preliminary prospectus
      were corrected on a timely basis in the prospectus, as then amended or
      supplemented. This indemnification provision shall apply separately to each
      Investor and liability hereunder shall not be joint and several.

    

    (c)
      Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action or proceeding (including any
      governmental action or proceeding) involving a Claim, such Indemnified Person
      or
      Indemnified Party shall, if a Claim in respect thereof is to be made against
      any
      indemnifying party under this Section 6, 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, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the
      case may be; provided, however, that an Indemnified Person or Indemnified Party
      shall have the right to retain its own counsel with the fees and expenses to
      be
      paid by the indemnifying party, if, in the reasonable opinion of counsel
      retained by the Indemnified Person or Indemnified Party, the representation
      by
      counsel of the Indemnified Person or Indemnified Party and the indemnifying
      party would be inappropriate due to actual or potential differing interests
      between such Indemnified Person or Indemnified Party and any other party
      represented by such counsel in such proceeding. The indemnifying party shall
      pay
      for only one (1) separate legal counsel for the Indemnified Persons or the
      Indemnified Parties, as applicable, and such counsel shall be selected by the
      Investor, if the Investor are entitled to indemnification hereunder, or the
      Company, if the Company is entitled to indemnification hereunder, as applicable.
      The Indemnified Party or Indemnified Person shall cooperate fully with the
      indemnifying party in connection with any negotiation or defense of any such
      action or Claim by the indemnifying party and shall furnish to the indemnifying
      party all information reasonably available to the Indemnified Party or
      Indemnified Person which relates to such action or Claim. The indemnifying
      party
      shall keep the Indemnified Party or Indemnified Person fully apprised at all
      times as to the status of the defense or any settlement negotiations with
      respect thereto. No indemnifying party shall be liable for any settlement of
      any
      action, claim or proceeding effected without its written consent, provided,
      however, that the indemnifying party shall not unreasonably withhold, delay
      or
      condition its consent. No indemnifying party shall, without the consent of
      the
      Indemnified Party or Indemnified Person, consent to entry of any judgment or
      enter into any settlement or other compromise which does not include as an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party or Indemnified Person of a release from all liability in
      respect to such Claim. Following indemnification as provided for hereunder,
      the
      indemnifying party shall be subrogated to all rights of the Indemnified Party
      or
      Indemnified Person with respect to all third parties, firms or corporations
      relating to the matter for which indemnification has been made. The failure
      to
      deliver written notice to the indemnifying party within a reasonable time of
      the
      commencement of any such action shall not relieve such indemnifying party of
      any
      liability to the Indemnified Person or Indemnified Party under this Section
      6,
      except to the extent that the indemnifying party is prejudiced in its ability
      to
      defend such action.

    

    (d)
      The
      indemnity agreements contained herein shall be in addition to (i)
      any
      cause of action or similar right of the Indemnified Party or Indemnified Person
      against the indemnifying party or others, and (ii)
      any
      liabilities the indemnifying party may be subject to pursuant to the
      law.

     

    Section
      7. CONTRIBUTION.

    

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided,
      however,
      that:
(i)
      no
      contribution shall be made under circumstances where the maker would not have
      been liable for indemnification under the fault standards set forth in Section
      6; (ii)
      no
      seller of Registrable Securities guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
      from any seller of Registrable Securities who was not guilty of fraudulent
      misrepresentation; and (iii)
      contribution
      by any seller of Registrable Securities shall be limited in amount to the net
      amount of proceeds received by such seller from the sale of such Registrable
      Securities.

    

    Section
      8. REPORTS
      UNDER THE 1934 ACT.

    

    With
      a
      view to making available to the Investor the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the Investor to sell securities of the Company to the public
      without registration (“Rule
      144”),
      provided that the Investor holds any Registrable Securities are eligible for
      resale under Rule 144 (k), the Company agrees to:

    

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company’s obligations under Section 5(c) of the Investment Agreement)
      and the filing of such reports and other documents is required for the
      applicable provisions of Rule 144; and

    

    (c) furnish
      to the Investor, promptly upon request, (i)
      a
      written statement by the Company that it has complied with the reporting
      requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
      a copy
      of the most recent annual or quarterly report of the Company and such other
      reports and documents so filed by the Company, and (iii)
      such
      other information as may be reasonably requested to permit the Investor to
      sell
      such securities pursuant to Rule 144 without registration.

    

    Section
      9. NO
      ASSIGNMENT OF REGISTRATION RIGHTS.

    

    The
      rights and obligations under this Agreement shall not be
      assignable.

     

    

    Section
      10. AMENDMENT
      OF REGISTRATION RIGHTS.

    

    The
      provisions of this Agreement may be amended only with the written consent of
      the
      Company and Investor. 

    

    Section
      11. MISCELLANEOUS.

    

    (a)
      Any
      notices or other communications required or permitted to be given under the
      terms of this Agreement that must be in writing will be deemed to have been
      delivered (i)
      upon
      receipt, when delivered personally; (ii)
      upon
      receipt, when sent by facsimile (provided a confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii)
      one (1)
      day after deposit with a nationally recognized overnight delivery service,
      in
      each case properly addressed to the party to receive the same. The addresses
      and
      facsimile numbers for such communications shall be:

    

    If
      to the
      Company:

    

    The
      Blackhawk Fund

    1802
      Carson Street, Suite 212-3018

    Carson
      City, NV 89701

    Telephone:
      (775) 887-0670

    Facsimile:
      

    

    If
      to the
      Investor:

    

    Dutchess
      Private Equities Fund, II, LP

    50
      Commonwealth Ave, Suite 2

    Boston,
      MA 02116

    Telephone:
      (617) 301-4700

    Facsimile:
      (617) 249-0947

    

    Each
      party shall provide five (5) business days prior notice to the other party
      of
      any change in address, phone number or facsimile number.

    

    (b)
      Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

    

    (c)
      This
      Agreement and the Transaction Documents constitute the entire agreement among
      the parties hereto with respect to the subject matter hereof and thereof. There
      are no restrictions, promises, warranties or undertakings, other than those
      set
      forth or referred to herein and therein.

    

    (d)
      This
      Agreement and the Transaction Documents supersede all prior agreements and
      understandings among the parties hereto with respect to the subject matter
      hereof and thereof.

    

    (e)
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof. Whenever required by the context
      of this Agreement, the singular shall include the plural and masculine shall
      include the feminine. This Agreement shall not be construed as if it had been
      prepared by one of the parties, but rather as if all the parties had prepared
      the same.

    

    (f)
      This
      Agreement may be executed in two or more identical counterparts, each of which
      shall be deemed an original but all of which shall constitute one and the same
      agreement. This Agreement, once executed by a party, may be delivered to the
      other party hereto by facsimile transmission of a copy of this Agreement bearing
      the signature of the party so delivering this Agreement.

    

    (g)
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    (h)
      In case
      any provision of this Agreement is held by a court of competent jurisdiction
      to
      be excessive in scope or otherwise invalid or unenforceable, such provision
      shall be adjusted rather than voided, if possible, so that it is enforceable
      to
      the maximum extent possible, and the validity and enforceability of the
      remaining provisions of this Agreement will not in any way be affected or
      impaired thereby.

    

    

    Section
      12. DISPUTES
      SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

    

    All
      disputes arising under this agreement shall be governed by and interpreted
      in
      accordance with the laws of the Commonwealth of Massachusetts, without regard
      to
      principles of conflict of laws. The parties to this agreement will submit all
      disputes arising under this agreement to arbitration in Boston, Massachusetts
      before a single arbitrator of the American Arbitration Association (“AAA”). The
      arbitrator shall be selected by application of the rules of the AAA, or by
      mutual agreement of the parties, except that such arbitrator shall be an
      attorney admitted to practice law in the Commonwealth of Massachusetts. No
      party
      to this agreement will challenge the jurisdiction or venue provisions as
      provided in this section. Nothing
      contained herein shall prevent the party from obtaining an
      injunction.

    

    

    *.*.*

    
      
        1

        BHWF.EQUITY.LINE.REGISTRATION.RIGHTS.SEPTEMBER.2006.FINAL

         

      

      
         

        
          

        

      

      
         

      

    

    

    SIGNATURE
      PAGE OF REGISTRATION RIGHTS AGREEMENT

    

     

    Your
      signature on this Signature Page evidences your agreement to be bound by the
      terms and conditions of the Investment Agreement and the Registration Rights
      Agreement as of the date first written above. 

     

     

    The
      undersigned signatory hereby certifies that he has read and understands the
      Registration Rights Agreement, and the representations made by the undersigned
      in this Registration Rights Agreement are true and accurate, and agrees to
      be
      bound by its terms. 

     

    

    DUTCHESS
      PRIVATE EQUITIES FUND, II, LP,

    BY
      ITS
      GENERAL PARTNER,

    DUTCHESS
      CAPITAL MANAGEMENT, LLC 

    

    By:
      /s/
      Douglas H. Leighton, Managing Member 

    

    

    THE
      BLACKHAWK FUND

    

    By:
      /s/
      Brent Fouch, CFOExhibit 34 (10.31)

    
      

      

    

    
      Exhibit
        10.31

       

      THIS
        NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR HAVE
        THEY BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE,
        AND
        THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED
        EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
        WHICH
        HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR
        (ii)
        PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
        ACT.

       

      CONVERTIBLE
        PROMISSORY NOTE

       

      (“Note”)

       

      
        	
                Principal
                  Amount:

              	
                El
                  Dorado Hills, California     

              
	
                $_______________

              	
                Effective
                  _______________

              

      

      

       

      1.    For
        value
        received, the undersigned, Chapeau, Inc., a Utah corporation, (the “Company”)
        promises to pay to the order of the ________________________ (“Lender”), in
        lawful money of the United States of America, the principal sum of
        ________________ ($___), or such lesser amount as is outstanding under this
        Note, plus simple interest thereon from the date hereof on the aggregate
        unpaid
        principal amount until such amount is paid in full at the annual rate of
        twelve
        percent (12%), or the maximum rate allowed by law, whichever is less (calculated
        on the basis of a 365 day year). Interest shall be payable quarterly on the
        last
        business day of each calendar quarter, commencing September 30, 2006. The
        Company covenants and agrees that it shall establish a separate bank account
        and
        deposit _______________ ($__________) therein. Funds from such account shall
        be
        used solely to pay interest, when due, under this Note until such time as
        this
        Note has been paid in full or converted into the Company’s Common Stock in
        accordance with the terms herein.

       

      2.    Principal
        and accrued interest under this Note shall be due and payable in full on
        _________________ (the “Maturity Date”). All payments on or in respect of this
        Note or the indebtedness evidenced hereby shall be made to Lender without
        set-off or counterclaim and free and clear of and without any deductions
        of any
        kind. 

       

      3.    This
        Note
        shall be convertible at any time into that number of shares of the Company’s
        Common Stock, (a) on or prior to _____________________, as is determined
        by
        dividing the outstanding principal amount and accrued interest under this
        Note
        by $1.25 per share and (b) after __________________, as is determined by
        dividing the outstanding principal amount and accrued interest under this
        Note
        by the lower of (i) seventy-five percent (75%) of the average closing price
        of
        the Company's common stock (as quoted on the OTC Bulletin Board or other
        listing
        service or exchange) for the ninety (90) calendar days immediately preceding
        the
        date of such conversion or (ii) $1.25 per share. 

       

      4.    Adjustment
        to Conversion Price If the Company shall at any time after the date of this
        Note
        issue or sell any common stock, including stock issued upon exercise of any
        option or warrant or conversion of any convertible security (“Additional Shares
        of Common”) without consideration or for a consideration per share less than the
        conversion price for this Note set forth in Section 3 above, then the current
        conversion price of this Note, simultaneously with such issuance or sale,
        shall
        be reduced to a price determined by multiplying such conversion price, by
        a
        fraction, (A) the numerator of which shall be the number of shares of common
        stock outstanding immediately prior to such issuance, including shares of
        common
        stock issuable upon conversion of outstanding options, warrants and other
        securities convertible into common stock (together, “Common Stock Outstanding”)
        plus the number of shares of common stock which the aggregate consideration
        received by the Company for the total number of Additional Shares of Common
        so
        issued would purchase at such conversion price and (B) the denominator of
        which
        shall be the number of shares of Common Stock Outstanding immediately prior
        to
        such issue plus the number of such Additional Shares of Common issued.

       

      
        
          
          

        

        
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      In
        case
        of the issuance or sale of additional common stock for consideration other
        than
        cash or for consideration a part of which shall be other than cash, the fair
        value of such non-cash consideration shall be determined by the Board of
        Directors of the Company in the good faith exercise of its business judgment.
        

       

      Notwithstanding
        anything in this Section 4 to the contrary, the conversion price for this
        Note
        shall not be adjusted by virtue of (i) the issuance and sale of, or the grant
        of
        options or restricted stock, directly or pursuant to a stock option plan
        or
        restricted stock plan approved by the Company’s Board of Directors, to
        employees, consultants, directors or officers of the Company in connection
        with
        the provision of services to the Company by such persons, as approved by
        the
        Company’s Board of Directors, (ii) the issuance of securities by the Company
        pursuant to options, warrants or convertible promissory notes currently
        outstanding, (iii) the issuance of securities in connection with equipment
        lease
        financing arrangements, credit agreements, debt financing or other commercial
        credit transactions as approved by the Company’s Board of Directors (not
        including equity securities issued or issuable pursuant to the conversion
        of
        debt instruments issued in such transactions), (iv) the issuance of securities
        in connection with licensing, technology transfer or joint venture arrangements
        approved by the Company’s Board of Directors, (v) securities issued for
        consideration other than cash pursuant to a merger, consolidation or similar
        business combination as approved by the Company’s Board of Directors, or
        (vi) the issuance of shares in connection with a public offering of
        securities registered under the Securities Act of 1933, as amended.

       

      5.    Upon
        conversion of this Note, the Company and Lender shall execute and deliver
        a
        Common Stock Purchase Agreement in substantially the form attached hereto
        as
Exhibit
        A.
        Lender
        also agrees to deliver the original of this Note (or a notice to the effect
        that
        the original Note has been lost, stolen or destroyed and an agreement acceptable
        to the Company whereby the holder agrees to indemnify the Company from any
        loss
        incurred by it in connection with this Note) simultaneously with the delivery
        of
        the Common Stock Purchase Agreement; provided, however, that upon satisfaction
        of the conditions set forth in this Section 5, this Note shall be deemed
        converted and of no further force and effect, whether or not it is delivered
        for
        cancellation as set forth in this sentence.

       

      6.    No
        fractional shares shall be issued upon conversion of this Note. In lieu of
        the
        Company issuing any fractional shares to Lender upon the conversion of this
        Note, the Company shall pay to Lender an amount equal to the product obtained
        by
        multiplying the applicable conversion price by the fraction of a share not
        issued pursuant to the previous sentence.

       

      
        
          
          

        

        
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            of 9

          
            

          

        

        
          
          

        

      

      

       

      7.    Upon
        conversion of this Note in full and the payment of any amounts specified
        in
        Section 6 above, the Company shall be forever released from all its obligations
        and liabilities under this Note.

       

      8.    This
        Note
        shall be secured by all of the assets of the Company and the Lender shall
        hold
        all rights and remedies pari passu with the Company’s other senior secured
        debtors.

       

      9.    If
        one or
        more of the following events shall have occurred and be continuing: (a) default
        in the payment of all or any part of the principal or interest of the Note;
        or
        (b) the Company pursuant to or within the meaning of any bankruptcy law (i)
        commences a voluntary case or proceeding; (ii) consents to the entry of an
        order
        for relief against it in an involuntary case or proceeding; (iii) consents
        to
        the appointment of a custodian of it or for all or substantially all of its
        property; (iv) makes a general assignment for the benefit of its creditors;
        or
        (v) admits in writing its inability to pay its debts as the same become due;
        or
        (c) a court of competent jurisdiction enters an order or decree under any
        bankruptcy law that (i) is for relief against the Company in an involuntary
        case
        against the Company; (ii) appoints a receiver of the Company or for all or
        substantially all of the property of the Company; or (iii) orders the
        liquidation of the Company, and such order or decree remains unstayed and
        in
        effect for sixty (60) days; then
        Lender,
        by notice in writing to the Company, may declare this Note to be due and
        payable
        immediately, and upon any such declaration the same shall become immediately
        due
        and payable.

       

      10.   This
        Note
        may be transferred or assigned only with the prior written consent of the
        Company and only in compliance with applicable federal and state securities
        laws. In the event of such transfer or assignment, Lender shall surrender
        this
        Note for registration of transfer or assignment, duly endorsed, or accompanied
        by a duly executed written instrument of transfer or assignment in form
        satisfactory to the Company. Thereupon, a new Note for like principal amount
        and
        interest will be issued to, and registered in the name of, the transferee
        or
        assignee. Interest and principal are payable only to the registered holder
        of
        the Note.

       

      11.   If
        any
        action or proceeding is commenced to enforce this Note or any right arising
        in
        connection with this Note, the prevailing party in such action or proceeding
        shall be entitled to recover from the other non-prevailing party the reasonable
        attorneys’ fees, costs, and expenses incurred by such prevailing
        party.

       

      12.   The
        Company and all endorsers, sureties and guarantors, jointly and severally,
        waive
        all presentments, demands for performance, notices of nonperformance, protests,
        notices of protest and notices of dishonor in connection with the delivery,
        acceptance, performance and enforcement of this Note.

       

      13.   This
        Note
        shall be deemed to be made under and shall be interpreted under the laws
        of the
        State of California (without giving effect to the conflict of law principles
        thereof). 

       

       

      

       

      
        	 	
                CHAPEAU,
                  INC.

              
	 	
                a
                  Utah corporation

              
	 	 	 
	 	
                By:
                  

              	
                _______________________

              
	 	
                Name:

              	
                Guy
                  A. Archbold

              
	 	
                Title:
                  

              	
                Chief
                  Executive Officer

              
	 	 	 
	 	
                Dated:
                  

              	_______________________

      

      

      
        
          
          

        

        
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      EXHIBIT
        A

      

      

      Form
        of Common Stock Purchase Agreement

      

      CHAPEAU,
        INC.

      

      COMMON
        STOCK PURCHASE AGREEMENT

       

      This
        Common Stock Purchase Agreement (“Agreement”) is made effective as of
____________,
        200_
        _
        (“Effective Date”), by and between Chapeau, Inc., a Utah corporation (the
“Company”), and ____________________ (“Purchaser”).

       

      For
        good
        and valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, the parties hereto agree as follows: 

       

      1.    Purchase
        and Sale of Common Stock.
        Subject
        to the terms and conditions of this Agreement, the Company hereby agrees
        to
        issue and sell to Purchaser and Purchaser hereby agrees to purchase from
        the
        Company upon the execution of this Agreement ________
        (_________________________)
        shares
        of its Common Stock (the “Shares”) for a purchase price of $____
        per
        share, in consideration for payment of $_________________
        cash.

       

      2.    Restriction
        Against Transfer.
        Purchaser agrees that it will not transfer, assign, hypothecate, or in any
        way
        dispose of any of the Shares, or any right or interest therein, whether
        voluntarily or by operation of law, or by gift or otherwise, without the
        prior
        written consent of the Company, except to the extent that a transfer is made
        in
        accordance with the terms of this Agreement. Any purported transfer in violation
        of any provision of this Agreement shall be void and ineffectual, and shall
        not
        operate to transfer any interest or title to the purported
        transferee.

       

      3.    Obligations
        of Subsequent Transferees.
        On the
        occurrence of a transfer of any Shares pursuant to the terms of this Agreement,
        the transferee shall execute an agreement to be bound by the restrictions
        on
        transfer set forth in this Agreement.

      

      4.    Notices.
        All
        notices required or desired to be given pursuant to this Agreement shall
        be in
        writing and shall be personally served (including by commercial delivery
        or
        courier service) or given by mail. Any notice given by mail shall be deemed
        to
        have been given and received when ninety-six (96) hours have elapsed from
        the
        time such notice was deposited in the United States mails, certified or
        registered and first-class postage prepaid, addressed, if intended to a party
        to
        this Agreement, at the address set forth below its signature or to such other
        address as such party may have designated by like written notice to each
        of the
        other parties from time to time.

       

      5.    Restriction
        on Certificates.
        All
        certificates representing Shares subject to the provisions of this Agreement
        shall have endorsed thereon, among others, the following legends:

       

      
        
          
          

        

        
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      (a)    “THESE
        SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF THE
        VARIOUS STATES, AND HAVE BEEN ISSUED AND SOLD PURSUANT TO AN EXEMPTION FROM
        THE
        ACT, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED BY THE HOLDER
        THEREOF
        AT ANY TIME, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT,
        FILED UNDER THE ACT COVERING THE SHARES, OR (2) UPON DELIVERY TO THE
        CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
        THE
        SHARES MAY BE TRANSFERRED WITHOUT REGISTRATION”; and

       

      (b)    Any
        other
        legend required to be placed thereon by state and federal securities
        authorities.

       

      6.    Purchaser
        Representations and Warranties.
        Purchaser acknowledges that the Shares have not been registered under the
        Securities Act of 1933, as amended, (the “Act”) in reliance upon certain
        exemptions from registration under the Act. In this connection, Purchaser
        represents and warrants to the Company as follows:

       

      (a)    Purchaser
        either has a preexisting personal or business relationship with the Company
        or
        its officers, directors or controlling persons or by reason of its business
        or
        financial experience or the business or financial experience of its professional
        advisors who are unaffiliated with and who are not compensated by the Company
        or
        any affiliate or selling agent of the Company, directly or indirectly, could
        be
        reasonably assumed to have the capacity to protect its own interests in
        connection with the transaction. 

       

      (b)    Purchaser
        is an “accredited investor” as defined in Regulation D promulgated under the
        Act.

       

      (c)    Purchaser
        recognizes that an investment in the Company involves substantial risks.
        Purchaser has taken full cognizance of and understands all of the risks related
        to the purchase of the Shares. Purchaser acknowledges that it has successfully
        considered and has, to the extent Purchaser believes such discussion necessary,
        discussed with Purchaser’s professional, legal, financial and tax advisers, the
        suitability of an investment in the Company for Purchaser’s particular financial
        and tax situation and has determined that the Shares are a suitable investment
        for him.

       

      (d)    Purchaser
        acknowledges that it has had the opportunity to ask questions of, and receive
        answers from, representatives of the Company concerning the terms and conditions
        of this Agreement and its investment in the Company. Any questions raised
        by
        Purchaser have been answers to the satisfaction of Purchaser. The Company
        has
        made available to Purchaser all documents and information that Purchaser
        has
        requested relating to an investment in the Company.

       

      (e)    Purchaser
        represents to the Company that it is purchasing the Shares for its own account,
        for investment only, and not with a view to, or for resale in connection
        with,
        any distribution thereof. Purchaser represents that it does not have any
        present
        intention of selling or otherwise transferring the Shares or any interest
        therein. Purchaser acknowledges and agrees that the Shares may not be sold,
        transferred, pledged or otherwise disposed of without registration under
        the Act
        and applicable state securities laws or in accordance with applicable exemptions
        therefrom.

       

      
        
          
          

        

        
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      (f)    Purchaser
        acknowledges that no representations or promises have been made concerning
        the
        marketability or value of the Shares. The Company has not agreed with or
        represented to Purchaser that the Shares will be purchased or redeemed from
        Purchaser at any time in the future. There have been no representations,
        promises or agreements that the Shares will be registered under the Act at
        any
        time in the future or otherwise qualified for sale under applicable securities
        laws. Purchaser acknowledges that it may be required to bear the economic
        risk
        of an investment in the Company for an indefinite period of time.

       

      (g)    The
        representations and warranties made by Purchaser herein are made by Purchaser
        with the intent that they be relied upon by the Company in determining the
        suitability of Purchaser as a purchaser of the Shares. In addition, Purchaser
        undertakes to notify the Company immediately of any change in any
        representation, warranty or other information relating to Purchaser set forth
        herein. Purchaser hereby agrees that such representations and warranties
        and any
        agreement, undertakings and acknowledgments herein shall survive the purchase
        of
        the Shares, and Purchaser hereby agrees to indemnify the Company, each of
        its
        affiliates and each of its and their respective officers and directors and
        hold
        them harmless from and against any and all loss, damages, liability or expense,
        including costs and reasonable attorneys’ fees, which they may incur by reason
        of or in connection with any misrepresentation or breach of representation,
        warranty or covenant of Purchaser set forth herein.

       

      7.    Federal
        Law Restrictions on Transfer.
        Without
        in any way limiting the representations set forth above or reducing any rights
        of the Company herein, Purchaser agrees not to make any disposition of all
        or
        any portion of the Shares unless and until:

       

      (a)    There
        is
        then in effect a Registration Statement under the Act covering such proposed
        disposition and such disposition is made in accordance with said Registration
        Statement; or

       

      (b)    Purchaser
        shall have notified the Company of the proposed disposition and shall have
        furnished the Company with a detailed statement of the circumstances surrounding
        the proposed disposition, and, if so requested by the Company, shall have
        furnished the Company with an opinion of Purchaser’s counsel to the effect that
        such disposition will not require registration of such shares under the Act,
        and
        such opinion of counsel shall have been concurred in by counsel for the Company
        and the Company shall have advised Purchaser of such concurrence.

       

      8.    Stop
        Transfer Instructions; Refusal to Transfer.
        Purchaser agrees that in order to ensure compliance with the restrictions
        referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, with respect to such certificates
        or
        instruments and, if the Company transfers its own securities, it may make
        appropriate notations to the same effect in its own records. The Company
        shall
        not be required (i) to transfer on its books any Shares that have been sold
        or otherwise transferred in violation of any of the provisions of this Agreement
        or (ii) to treat as owner of such Shares or to accord the right to vote or
        pay dividends to any purchaser or other transferee to whom such Shares shall
        have been so transferred.

       

      
        
          
          

        

        
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      9.    Market
        Stand-Off.
        In
        connection with any underwritten public offering by the Company of its equity
        securities pursuant to an effective registration statement filed under the
        Act,
        Purchaser agrees not to sell, make any short sale of, loan, hypothecate,
        pledge,
        grant any option for the purchase of, or otherwise dispose of or transfer
        for
        value or otherwise agree to engage in any of the foregoing transactions with
        respect to the Shares without the prior written consent of the Company or
        its
        underwriters, for such period of time from and after the effective date of
        such
        registration statement as may be requested by the Company or such
        underwriters.

       

      10.  
          Piggy-back
        Registration Rights.
        

       

      (a)    If
        (but
        without any obligation to do so) the Company proposes to register (including
        for
        this purpose a registration effected by the Company for stockholders other
        than
        Purchaser) any of its securities under the Act in connection with the public
        offering of such securities solely for cash (other than a registration (i)
        on
        Form S-8 or any form which does not include substantially the same information
        as would be required to be included in a registration statement covering the
        sale of the Shares, or (ii) with respect to an employee benefit plan, or
        (iii)
        solely in connection with a Rule 145 transaction under the Act), the Company
        shall, each such time, promptly give Purchaser written notice of such
        registration together with a list of the jurisdictions in which the Company
        intends to attempt to qualify such securities under applicable state securities
        laws. Upon the written request of Purchaser given within twenty (20) business
        days after delivery of such written notice by the Company, the Company shall
        use
        its best efforts to cause to be registered under the Act all of the Shares
        that
        Purchaser has requested to be registered. 

       

      (b)    In
        connection with an offering pursuant to Section 10(a) including an underwriting
        of shares of the Company’s capital stock, the right of Purchaser to registration
        pursuant to Section 10(a) shall be conditioned upon Purchaser’s participation in
        such underwriting and the inclusion of Purchaser’s Shares in the underwriting to
        the extent provided herein. Purchaser shall (together with the Company and
        any
        other stockholders distributing their securities through such underwriting)
        enter into an underwriting agreement in customary form with the underwriter
        or
        underwriters selected by the Company. Notwithstanding any other provision
        of
        Section 10(a), if the underwriter determines that market factors require
        a
        limitation of the number of shares to be underwritten, the underwriter may
        exclude some or all Shares from such registration and underwriting and the
        Company shall so advise all persons requesting registration.

       

      11.     
         THE
        SALE
        OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
        WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE
        ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
        CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE
        SALE
        OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTIONS 25100, 25102 OR 25105
        OF
        THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
        ARE EXPRESSLY CONDITIONED UNLESS THE SALE IS SO EXEMPT.

       

      
        
          
          

        

        
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      12.     
         Miscellaneous.
        

       

      (a)    Further
        Assurances.
        The
        parties agree to execute any additional instruments and to take any additional
        action as may reasonably be necessary to carry out the intent of this
        Agreement.

       

      (b)    Successors
        and Assigns.
        This
        Agreement shall inure to the benefit of the successors and assigns of the
        Company and, subject to the restrictions on transfer set forth in this
        Agreement, be binding upon Purchaser, its heirs, executors, administrators,
        successors, and assigns.

       

      (c)    Entire
        Agreement; Amendment.
        This
        Agreement, together with any exhibits hereto, constitute the entire agreement
        of
        the parties with respect to the subject matter hereof and thereof. No amendment
        or variation of the terms of this Agreement, with or without consideration,
        shall be valid unless made in writing and signed by all of the parties to
        this
        Agreement at the time of such amendment.

      

      (d)    Governing
        Law; Severability.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of California as such laws are applied to agreements between California
        residents entered into and to be performed entirely in California. To the
        extent
        that any of the agreements set forth herein, or any word, phrase, clause,
        or
        sentence thereof shall be found to be illegal or unenforceable for any reason,
        such agreement, word, phrase, clause, or sentence shall be modified or, if
        necessary, deleted in such a manner so as to make the Agreement, as modified,
        legal and enforceable under applicable laws.

      

      (e)    Counterparts.
        This
        Agreement may be executed in counterparts, each of which when executed and
        delivered will be deemed to be an original but all of which taken together
        will
        constitute one and the same Agreement.

       

      

       

      

       

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

       

      
        	 	
                CHAPEAU,
                  INC.

              
	 	 	 
	 	 
	 	 
	 	 
	 	
                By:
                  ___________________________

              
	 	 	
                Name:
                  Guy A. Archbold

              
	 	 	
                Title:
                  Chief Executive Officer

              
	 	 	 
	 	
                Address:

              	
                1190
                  Suncast Lane, Suite 2

              
	 	 	
                El
                  Dorado Hills, CA 95762

              
	 	 	 
	 	 
	 	
                PURCHASER

              
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
                By:

              	
                ___________________________

              
	 	 	
                Name:______________________

              
	 	 	 
	 	 	 
	 	
                Address:

              	
                
                  ___________________________

                

              
	 	 	
                
                  ___________________________

                

              
	 	 	
                 

              
	 	 	
                 

              

      

      

      
 

       

       

       

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