EXHIBIT 3.6
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| Draft Dated |
| 03/10/97, 9:53am |
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REGISTRATION RIGHTS AGREEMENT
among
ALLIANCE RESOURCES PLC,
AND
LASALLE STREET NATURAL RESOURCES CORPORATION
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Dated as of March __, 1997
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TABLE OF CONTENTS
1. Background........................................................ 1
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2. Registration Under Securities Act, etc............................ 1
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2.1 Registration on Request...................................... 1
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2.2 Incidental Registration...................................... 3
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2.3 Registration Procedures...................................... 4
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2.4 Underwritten Offerings....................................... 8
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2.5 Preparation; Reasonable Investigation........................ 8
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2.6 Indemnification.............................................. 9
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3. Definitions....................................................... 11
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4. Rule 144 and Rule 144A............................................ 13
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5. Amendments and Waivers............................................ 13
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6. Notices........................................................... 13
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7. Assignment........................................................ 14
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8. Calculation of Percentage Interests of Registrable Securities..... 14
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9. No Inconsistent Agreements........................................ 14
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10. Severability...................................................... 14
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11. Entire Agreement.................................................. 14
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12. Descriptive Headings.............................................. 14
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13. Governing Law..................................................... 14
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14. Counterparts...................................................... 14
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15. Termination....................................................... 15
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REGISTRATION RIGHTS AGREEMENT, dated as of March __, 1997 by and among
Alliance Resources Plc, (the "Company"), and LaSalle Street Natural Resources
Corporation ("LSNRC").
1. Background.
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(a) Pursuant to an Assignment of Overriding Royalty Interest,
dated as of the date hereof between the Company and LSNRC (the "Assignment"),
the Company has agreed to purchase from LSNRC in consideration for the issuance
by the Company to LSNRC of 1,500,000 of the Company's ordinary shares, par value
40p each (the "New Alliance Shares"), warrants to purchase ____________ New
Alliance Shares at an exercise price of __p per share (the "Bank Warrants").
Capitalized terms used in this Agreement but not otherwise defined have the
meanings given them in Section 3.
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(b) As an inducement to LSNRC to enter into the Assignment and
in satisfaction of a condition to the obligations of the Company under the
Assignment, the Company has agreed to register the New Alliance Shares
issuable pursuant to the Assignment and the New Alliance Shares issuable
upon exercise of LSNRC Warrants, upon the terms and subject to the conditions
contained in this Agreement.
2. Registration Under Securities Act, etc.
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2.1 Registration on Request.
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(a) Request. At any time, or from time to time, upon
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written request of one or more holders (the "Initiating Holders") of Registrable
Securities representing not less than 50% of the Registrable Securities that the
Company effect the registration under the Securities Act and any related
qualification under or compliance with blue sky or other state securities laws
of all or part of such Initiating Holders' Registrable Securities, the Company
promptly will give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company will use
its best efforts to effect, within 120 days after receiving such request for
registration, the registration (including, without limitation, the execution of
an undertaking to file post effective amendments and appropriate qualifications
under or other compliance with applicable blue sky or other state securities
laws) under the Securities Act of
(i) the Registrable Securities that the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities that the Company has
been requested to register by the holders thereof (such holders
together with the Initiating Holders hereinafter are referred to as the
"Selling Holders") by written request given to the Company within 30
days after the giving of such written notice by the Company, all to the
extent necessary to permit the disposition of the Registrable
Securities (in accordance with the methods of disposition thereof
intended by the Selling Holders) to be registered.
(b) Registration of Other Securities. Whenever the Company
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shall effect a registration pursuant to this Section 2.1, securities other than
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Registrable Securities may be included in the registration; provided that, in
connection with an underwritten offering by one or
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more holders of Registrable Securities, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless (a) the managing underwriter of such offering shall have advised each
Selling Holder of Registrable Securities to be covered by such registration in
writing that the inclusion of such other securities would not adversely affect
such offering or (b) the Selling Holders of not less than 50% of all Registrable
Securities to be covered by such registration shall have consented in writing to
the inclusion of such other securities.
(c) Registration Statement Form. Registrations under this
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Section 2.1 shall be on such appropriate registration form of the Commission (i)
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as shall be reasonably selected by the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the method or
methods of disposition intended by such holders.
(d) Effective Registration Statement. A registration
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requested pursuant to this Section 2.1 shall be deemed to have been effected if
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(i) the Company shall have filed a registration statement as requested by the
holders and thereafter the holders shall have abandoned the intended sale of
their New Alliance Shares as contemplated by the registration statement
otherwise than for any failure on the part of the Company or (ii) (A) a
registration statement with respect thereto has become effective and remained
effective in compliance with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement; provided, that such
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period need not exceed 120 days (which period shall be increased by the
cumulative duration of all Blackout Periods), (B) after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason not attributable to such Selling Holder, or (C) the conditions to
closing specified in the purchase agreement or underwriting agreement, if any,
entered into in connection with such registration are not satisfied or waived,
by reason of a failure on the part of the Company.
(e) Selection of Underwriters. The underwriter or
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underwriters of each underwritten offering of the Registrable Securities by one
or more holders of Registrable Securities in connection with a registration
requested pursuant to this Section 2.1 shall be selected by the Selling Holders
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of at least 50% of the Registrable Securities to be included in such
registration and shall be reasonably acceptable to the Company.
(f) Priority in Requested Registration. If the managing
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underwriter of any underwritten offering pursuant to this Section 2.1 shall
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advise the Company in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering within a price range acceptable to the Selling Holders of
more than 50% of the Registrable Securities requested to be included in such
registration, the Company will include in such registration, to the extent of
the number and type that the Company is so advised can be sold in such offering,
(A) first, all Registrable Securities requested to be included in such
registration, pro rata among the Selling Holders requesting such registration on
the basis of the estimated gross proceeds from the sale thereof and (B) second,
other securities to
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be included in such registration, to the extent of the number and type the
Company is so advised can be sold in such offering.
(g) Limitations on Registration on Request. The Company will
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not be required to (i) file, in the aggregate, more than two registration
statements pursuant to this Section 2.1 each of which (A) has been declared or
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ordered effective (including without limitation qualification under or other
compliance with state blue sky or securities laws requested) and which
effectiveness has not been suspended or stopped by any governmental or judicial
authority, and (B) remains continuously effective for a period of time not less
than the Effective Period, or (ii) effect a registration pursuant to this
Section 2.1 within the twelve-month period occurring immediately subsequent to
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the effectiveness (within the meaning of Section 2.1(d)) of a registration
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statement filed pursuant to this Section 2.1.
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(h) Notwithstanding the other provisions of this
Section 2.1, the Company shall not be obligated to effect a registration
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pursuant to this Section 2.1 during the period starting with the date 60 days
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prior to the Company's good faith estimated date of filing of, and ending on a
date 120 days following the effective date of, a registration statement for the
underwritten public offering of securities for the account of the Company;
provided that the Company is at all times during that period diligently pursuing
such registration.
(i) Expenses. The Company will pay all Registration Expenses
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in connection with the registrations requested pursuant to this Section 2.1.
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2.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the Company
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at any time proposes to register any of its securities under the Securities Act
by registration on Forms S-1, S-2, S-3, F-1, F-2 or F-3 or any successor or
similar form(s) (except registrations on such Forms or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or exchange and except for
registrations pursuant to Section 2.1) (and any related qualification under or
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compliance with blue sky or other state securities laws), whether or not for
sale for its own account, it will each such time give prompt written notice to
all registered holders of Registrable Securities of its intention to do so and
of such holders' rights under this Section 2.2. Upon the written request of any
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such holder (each, a "Requesting Holder") made as promptly as practicable and in
any event within 30 days after the receipt of any such notice (20 days if the
Company states in such written notice or gives telephonic notice to all
registered holders of Registrable Securities, with written confirmation to
follow promptly thereafter, stating that (i) such registration will be on Form
S-3 or F-3 and (ii) such shorter period of time is required because of a planned
filing date) (which request shall specify the Registrable Securities intended to
be disposed of by such Requesting Holder), the Company will use its best efforts
to effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by the Requesting
Holders thereof to the extent requisite to permit the disposition thereof in
accordance with the method or methods of disposition intended by such holders;
provided, however, that if, at any time after giving written notice of its
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intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any
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obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to cause such registration to be
effected as a registration under Section 2.1, and (ii) in the case of a
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determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities.
(b) Priority in Incidental Registrations. If the managing
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underwriter of any underwritten offering pursuant to this Section 2.2 shall
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advise the Company in writing that, in its opinion, the number or type of
Registrable Securities requested to be included in such registration exceeds the
number or type that can be sold in such offering within a price range acceptable
to the Company, then the Company will include in such registration, to the
extent of the number and type that the Company is so advised can be sold in such
offering, (A) first, all the securities proposed by the Company to be sold for
its own account and (B) second, such Registrable Securities requested to be
included in such registration pursuant to this Section 2.2, pro rata among each
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of the Requesting Holders on the basis of the estimated gross proceeds from the
sale thereof, to the extent of the number and type the Company is so advised can
be sold in such offering.
(c) Expenses. The Company will pay all Registration Expenses
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in connection with any registration effected pursuant to this Section 2.2.
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2.3 Registration Procedures.
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(a) If and whenever the Company is required to use its best
efforts to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 2.1 and 2.2, the Company will, as
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expeditiously as possible:
(i) prepare and (as soon as possible but in any event no
later than 60 days after the end of the period within which requests
for registration may be given to the Company pursuant to Section 2.1(a)
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or 2.2(a), as applicable) file with the Commission the requisite
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registration statement to effect such registration and thereafter use
its best efforts to cause such registration statement to become
effective as soon as practicable thereafter; provided, however, that
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the Company may discontinue any registration of its securities that are
not Registrable Securities (and, under the circumstances specified in
Section 2.2, its securities that are Registrable Securities) at any
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time prior to the effective date of the registration statement relating
thereto;
(ii) prepare and file with the Commission such amendments,
supplements and post-effective amendments to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective (the "Effective
Period") and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement until such time as all of Registrable Securities
covered by such registration statement have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set
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forth in such registration statement; provided, that such period need
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not exceed 180 days (which period shall be increased by the cumulative
duration of all Blackout Periods);
(iii) furnish to each seller of Registrable Securities
covered by such registration statement, such number of conformed copies
of such registration statement and of each such amendment, supplement
and post-effective amendment thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may reasonably
request;
(iv) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states, possessions and territories of the United States of
America where an exemption is not available and as each seller of
Registrable Securities covered by such registration statement shall
reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect,
and (z) to take any other action that may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities to be sold by such seller, except that
the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not be but for the requirements of this subdivision
(iv) be obligated to be so qualified or to consent to general service
of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other federal, state or local governmental agencies
or authorities as may be necessary in the opinion of counsel to the
Company, to the seller or sellers of Registrable Securities or to the
underwriters to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities in accordance with the
method or methods of disposition intended by such seller or sellers;
(vi) furnish to each seller of Registrable Securities, and
each such seller's underwriters, if any, a signed counterpart of
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement and, if
applicable, the date of the closing under the underwriting
agreement, reasonably satisfactory in form and substance to
such seller, and
(y) a "comfort" letter, dated the effective date of
such registration statement and, if applicable, the date of
the closing under the underwriting agreement, signed by the
independent public accountants who have certified the
Company's financial statements included or incorporated by
reference in such registration statement,
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covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings
of securities;
(vii) promptly notify each seller 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,
upon discovery that, or upon 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 any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller promptly prepare and furnish to it a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the holder of such
securities, such prospectus shall not include an 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 not misleading in
the light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder, and furnish to each
such seller of Registrable Securities at least five business days prior
to the filing thereof a copy of any amendment, supplement or post-
effective amendment to such registration statement or prospectus and
shall not file any thereof to which any such seller shall have
reasonably objected on the grounds that such amendment, supplement or
post-effective amendment does not comply in all material respects with
the requirements of the Securities Act;
(ix) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the
effective date of such registration statement;
(x) use its best efforts to list all New Alliance Shares
covered by such registration statement on any securities exchange or
national market system on which New Alliance Shares covered by such
registration statement are then listed;
(xi) not later than the effective date of such
registration statement, provide a CUSIP number for all Registrable
Securities and provide the applicable transfer agent or trustee with
printed certificates for the Registrable Securities that are in a form
eligible for deposit with the Depositary Trust Company;
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(xii) in the event of the issuance of any stop order
suspending the effectiveness of such registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Securities for sale in
any jurisdiction, promptly notify each holder of Registrable Securities
in writing of such occurrence and use its best efforts promptly to
obtain the withdrawal of such order; and
(xiii) promptly notify each seller of Registrable Securities
covered by such registration statement (A) when such registration
statement or any post-effective amendment thereto has become effective
under the Securities Act and each applicable state law and (B) of any
request by the Commission or any other federal or state governmental
authority for amendments or supplements to a registration statement or
the related prospectus or for additional information.
(b) The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Company
such information regarding such seller and the distribution of such securities
by such seller as the Company may from time to time reasonably request in
writing. Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of any kind described in subdivision (a)(vi) of this
Section 2.3, such holder will forthwith discontinue such holder's disposition of
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Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (a)(vi) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
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the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
(c) If, prior to the effectiveness of any registration
statement otherwise required to be prepared and filed by the Company pursuant to
Section 2.1, or while a registration statement that includes Registrable
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Securities is effective under Section 2.1 or Section 2.2, the Board of Directors
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of the Company determines in good faith either (i) that the filing of the
registration statement would have a material adverse effect on the Company (an
"Information Blackout") or (ii) that the Company is required, pursuant to the
Exchange Act, to prepare financial statements in connection with a material
acquisition or other event (a "Financial Statement Blackout"), and in either
such case shall furnish to each holder of Registrable Securities a statement
regarding such determination (the "Blackout Period"), then the Company's
obligation to effect such registration hereunder or to maintain the
effectiveness of the registration statement hereunder shall be deferred or
suspended for a period not to exceed 120 days after the Company's Board of
Directors makes such good faith determination; provided, that if any such
registration statement is effective, the Company may, upon written notice of an
Information Blackout or a Financial Statement Blackout, as the case may be, to
each holder of Registrable Securities, suspend sales of Registrable Securities
pursuant to such registration statement for the Blackout Period. If the Company
shall postpone the filing of a registration statement pursuant to the preceding
provisions of this paragraph, holders of Registrable Securities with respect to
which registration has been requested, shall have the right to withdraw the
request for registration by giving written notice to the
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Company within 30 days after receipt of the notice of postponement and, if such
withdrawal reduces the amount of Registrable Securities to be included in the
registration to less than 50% of all the Registrable Securities, the
registration will be withdrawn and such requested registration shall not be
counted for purposes of the requested registrations to which holders of
Registrable Securities are entitled pursuant to this Section 2.1.
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2.4 Underwritten Offerings.
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(a) Requested Underwritten Offerings. If requested by the
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underwriters for any underwritten offerings by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
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into an underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to each such
holder and the underwriters and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
that type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.6.
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(b) Incidental Underwritten Offerings. If the Company at any
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time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
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through one or more underwriters, then, if the holders of Registrable Securities
wish to have their Registrable Securities included in the registration
statement, those holders will enter into an underwriting agreement with the
underwriters for the offering, such agreement to be reasonably satisfactory in
form and substance to the Company and the underwriters and to contain such
representations and warranties by the holders and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.6.
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2.5 Preparation; Reasonable Investigation. In connection with the
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preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will (i) give the holders of Registrable
Securities registered or to be registered under such registration statement,
their underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment, supplement or post-effective amendment thereto, (ii) prior to the
filing of any document that is to be incorporated by reference into any such
registration statement or prospectus (after initial filing of the registration
statement), promptly provide copies of such document to the holders of
Registrable Securities covered by such registration statement and to the
managing underwriters, if any, (iii) make the Company's representatives
available for discussion of any such document referred to in the preceding
clauses (i) or (ii) and (iv) give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
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2.6 Indemnification.
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(a) Indemnification by the Company. The Company will
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indemnify and hold harmless, in the case of any registration statement filed
pursuant to Section 2.1 or 2.2, each seller of any Registrable Securities
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covered by such registration statement and each other Person who participates as
an underwriter in the offering or sale of securities of the Company covered by
such registration statement and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act, and
their respective directors, officers, employees, stockholders, affiliates,
agents and partners, against any losses, claims, damages or liabilities, joint
or several, to which such seller, underwriter or controlling person or any such
director, officer or partner may become subject under the Securities Act or
otherwise, including, without limitation, the fees and expenses of legal
counsel, insofar as such losses, claims, damages or liabilities (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 any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment,
supplement or post-effective amendment thereto, (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any violation
by the Company, of the Securities Act, the Exchange Act, or any rule or
regulation promulgated thereunder applicable to the Company, or of any blue sky
or other state securities law or any rule of regulation promulgated thereunder
applicable to the Company, and the Company will reimburse each such seller,
underwriter and controlling person and each such director, officer and partner
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable in any such case to
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the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment, supplement or post-effective amendment in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such seller or underwriter, as the case may be; and provided, further,
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that the Company shall not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such seller, underwriter or
controlling Person or any such director, officer or partner and shall survive
the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As a condition to
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including any Registrable Securities in any registration statement, the Company
shall have received an undertaking satisfactory to it from the prospective
seller of such Registrable Securities, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in subdivision (a) of this
Section 2.6) the Company, and each director of the Company, each officer
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of the Company and each other Person, if any, who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls the Company or any such underwriter within the meaning of the
Securities Act, with respect to any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and shall
survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
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indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.6,
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such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
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give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 2.6, except to the
-----------
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party shall be entitled to participate in and, unless the
indemnified party has been advised in writing by counsel that a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. If, the indemnified party has been advised in writing by counsel
that a conflict of interest may exist between such Person and the indemnifying
party with respect to such claim, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such Person if such
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party that is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim. No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation or that
requires action other than the payment of money by the indemnifying party.
10
(d) Contribution. If the indemnification provided for in
------------
this Section 2.6 shall for any reason be held by a court to be unavailable to an
-----------
indemnified party under subparagraph (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action or proceeding in respect thereof,
then, in lieu of the amount paid or payable under subparagraph (a) or (b)
hereof, the indemnified party and the indemnifying party under subparagraph (a)
or (b) hereof shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending the same), (i) in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party that resulted in such loss, claim, damage or liability, or
action or proceeding in respect thereof, with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the indemnified party and the
indemnifying party from the offering of the securities covered by such
registration statement. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Such prospective sellers' obligations to contribute as
provided in this subparagraph (d) are several and not joint. In addition, no
Person shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and contribution
---------------------
similar to that specified in the preceding subdivisions of this Section 2.6
-----------
(with appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
(f) Indemnification Payments. The indemnification and
------------------------
contribution required by this Section 2.6 shall be made by periodic payments of
-----------
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
3. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Blackout Period" is defined in Section 2.3.
--------------- -----------
"Commission" means the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
------------
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934,
11
as amended, shall include a reference to the comparable section, if any, of any
such similar federal statute.
"Initiating Holder" is defined in Section 2.1.
----------------- -----------
"Person" means any individual, corporation, partnership, trust, estate,
------
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
"Registrable Securities" means the New Alliance Shares issuable to the
----------------------
Bank pursuant to the Assignment, the New Alliance Shares issuable upon exercise
of LSNRC Warrants and all Related Registrable Securities. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold to the public as permitted by Rule 144,
Regulation S or any other successor provision under the Securities Act, (c) they
shall have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company and
subsequent distribution of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force or (d)
they shall have ceased to be outstanding. All references to percentages of
Registrable Securities shall be calculated pursuant to Section 8.
---------
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Section 2, including, without limitation, all
---------
registration, filing, NASD, listing fees, all fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audit or "cold comfort" letters required by or incident
to such performance and compliance, but excluding any underwriting discounts or
commissions with respect to the Registrable Securities.
"Related Registrable Securities" means any securities of the Company
------------------------------
issued or issuable with respect to any Registrable Securities by way of a
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such similar federal statute.
"Selling Holder" is defined in Section 2.1.
-------------- -----------
12
4. Rule 144 and Rule 144A. The Company shall take all actions necessary
----------------------
or reasonably requested by any holder of Registrable Securities to enable
holders of Registrable Securities to sell such securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, (b) Rule 144A under the Securities Act, as such Rule may be amended from
time to time, and (c) any similar rules or regulations hereafter adopted by the
Commission, including, without limiting the generality of the foregoing, filing
on a timely basis all reports required to be filed by the Exchange Act (or, if
the Company is not required to file such reports, making publicly available, at
the request of any holder of Registrable Securities, other information necessary
to enable such holder to sell such securities pursuant to such rule); provided
--------
that this provision will not prohibit the Company from ceasing to be registered
pursuant to Section 12 of the Exchange Act. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended with the
----------------------
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of at least 50% of the Registrable
Securities affected by such amendment, action or omission to act. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
---------
Securities shall have been marked to indicate such consent.
6. Notices. All notices, demands and other communications provided for
-------
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telex, telegram,
telecopier, courier service or personal delivery:
(a) if to LSNRC, addressed to them in the manner set forth
in the Assignment, or at such other address as they shall have furnished to the
Company in writing;
(b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing, or,
until any such other holder so furnishes to the Company an address, then to and
at the address of the last holder of such Registrable Securities who has
furnished an address to the Company; or
(c) if to the Company, addressed to it in the manner set
forth in the Assignment, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered, if
mailed; when answered back, if telexed; and when receipt is confirmed, if
telecopied.
13
7. Assignment. Neither party may assign its rights or obligations under
----------
this Agreement without the consent of the other party. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and, with respect to the Company, its respective successors and assigns
and, with respect to each Purchaser, its successors and assigns, including any
holder of any Registrable Securities, subject to the provisions respecting the
minimum numbers of percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
8. Calculation of Percentage Interests of Registrable Securities. For
-------------------------------------------------------------
purposes of this Agreement, all references to a percentage of the Registrable
Securities shall be calculated based upon the number of shares of the
Registrable Securities with respect to which such calculation is required to be
made, assuming the exercise of all Bank Warrants into New Alliance Shares at the
then-current exercise price.
9. No Inconsistent Agreements. The Company will not hereafter enter into
--------------------------
any agreement with respect to its securities that is inconsistent or conflicts
with this Agreement or the rights granted to the holders of Registrable
Securities in this Agreement.
10. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any jurisdiction, in any respect and for
any reason, the validity, legality and enforceability of any such provision in
every other respect, and in any other jurisdiction, and of the remaining
provisions contained herein shall not be in any way impaired thereby.
11. Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement (including the schedules and exhibits thereto) and LSNRC Warrants is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein or therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, the Purchase
Agreement (including the schedules and exhibits thereto) and the Warrants
supersede all prior agreements and understandings between the parties hereto
with respect to such subject matter.
12. Descriptive Headings. The descriptive headings of the several
--------------------
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
13. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Illinois applicable to agreements made and to be performed entirely
within such State.
14. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
14
15. Termination. Notwithstanding anything to the contrary in this
-----------
Agreement, this Agreement shall terminate with respect to any holder on the
earlier to occur of (a) the date that the number of Registrable Securities held
by the holder is less than 1/2% of the Company's outstanding New Alliance
Shares and no Registrable Securities held by the holder are required to bear a
legend restricting their transfer as "restricted securities" under Rule 144 or
(b) seven years from the date of this Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
COMPANY:
ALLIANCE RESOURCES PLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BANK:
BANK OF AMERICA NT & SA
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------