EXHIBIT 30
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of
August 26, 2004, between INTEROIL CORPORATION., a New Brunswick corporation (the
"Company") and the Purchasers set forth on the signature pages hereto (each, a
"Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, pursuant to the Securities Purchase Agreement, dated on or about
the date hereof, by and between the Company and the purchasers signatory thereto
(the "Purchase Agreement"), the Company has agreed to sell and issue to the
Purchasers, and the Purchasers have agreed, severally and not jointly, to
purchase from the Company, an aggregate of up to $40,000,000 in principal amount
of the Company's 8 7/8 % Senior Convertible Debentures due August 28, 2009 (the
"Debentures"), subject to the terms and conditions set forth therein; and
Whereas, the terms of the Debentures provide that they will be convertible
into shares (the "Underlying Shares") of the common stock, no par value per
share (the "Common Stock") of the Company; and
WHEREAS, pursuant to the Purchase Agreement, the Company issued five-year
warrants ("Warrants") exercisable into shares of Common Stock (the "Warrant
Shares") at the exercise price set forth therein;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in the Purchase Agreement and
this Agreement, the Company and each Purchaser, severally and not jointly, agree
as follows:
1. Certain Definitions. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Purchase
Agreement or the Debentures. As used in this Agreement, the following terms
shall have the following respective meanings:
"Closing" and "Closing Date" shall mean the Initial Closing and Initial
Closing Date with respect to the purchase of the Debentures and Warrants as
defined in the Purchase Agreement.
"Commission" or "SEC" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Holder" and "Holders" shall include the Purchaser and any transferee or
transferees of Registrable Securities which have not ceased to be Registrable
Securities to whom the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement and the Purchase Agreement.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the rules and regulations applicable in the Province of Ontario
and in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement by such authorities.
"Registrable Securities" shall mean: (i) the Interest Shares (as defined
in the Debentures); (ii) the Underlying Shares and the Warrant Shares (without
regard to any limitations on beneficial ownership contained in the Debentures or
Warrants) issued or issuable to each Holder (a) upon conversion of the
Debentures or exercise of the Warrants, (b) upon any distribution with respect
to, any exchange for or any replacement of such Debentures or Warrants or (c)
upon any conversion, exercise or exchange of any securities issued in connection
with any such distribution, exchange or replacement; (iii) securities issued or
issuable upon any stock split, stock dividend, recapitalization, exchange or
similar event with respect to the Debentures, the Warrants, the Underlying
Shares, the Warrant Shares or the Interest Shares; and (iv) any other security
issued as a dividend or other distribution with respect to, in exchange for or
in replacement of the securities referred to in the preceding clauses, except
that any such Underlying Shares, Warrant Shares, Interest Shares or other
securities shall cease to be Registrable Securities when (x) they have been sold
to the public or (y) they may be sold by the Holder thereof under Rule 144(k).
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement (such amount not to exceed $10,000 in the aggregate for each
registration), including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, and blue
sky fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by the Holders holding at least a two-thirds
interest of the Registrable Securities) for a review of the Registration
Statement and related documents, and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
"Registration Statement" shall have the meaning set forth in Section 2(a)
herein.
"Registration Statement/Prospectus" shall have the meaning set forth in
Section 2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Rule 144(k)" means Rule 144(k) under Securities Act, or any successor
rule.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and transfer taxes applicable to the sale of Registrable Securities
and all fees and disbursements of counsel for Holders not included within
"Registration Expenses".
2. Registration Requirements. The Company shall use its best efforts
to effect the registration of the resale of the Registrable Securities
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification
2
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and under
the rules and regulations applicable in the Province of Ontario) as would permit
or facilitate the resale of all the Registrable Securities in the manner
(including manner of sale) and in all states, territories and possessions of the
United States reasonably requested by the Holder. The Company shall also use its
best efforts to qualify the resale of the Registerable Securities by prospectus
under the Securities laws of the Province of Ontario. Such best efforts by the
Company shall include, without limitation, the following:
(a) The Company shall, as expeditiously as possible after the
Closing Date:
(i) But in any event within 90 days of the Closing,
prepare and file (x) a registration statement with the Commission
pursuant to the rules and regulations applicable in the home
jurisdiction of the Company and Rule 467 and Rule 408 under the
Securities Act on Form F-10, F-1 or S-1 or any corresponding
successor forms that may be available under the Securities Act (or
in the event that the Company is ineligible to use such forms, such
other appropriate form as the Company is eligible to use under the
Securities Act) covering resales by the Holders as selling
stockholders (not underwriters) of the Registrable Securities and no
other securities (the "Registration Statement"), which Registration
Statement, to the extent allowable under the Securities Act and the
rules promulgated thereunder (including Rule 416), shall state that
such Registration Statement also covers the resale of such
indeterminate number of additional shares of Common Stock as may be
issued upon conversion of the Debentures and exercise of the
Warrants and (y) prior to or contemporaneously with the filing of
the Registration Statement, file with the Ontario Securities
Commission a preliminary Canadian prospectus (the "Canadian
Prospectus" and, collectively referred to with the Registration
Statement as the "Registration Statement/Prospectus") covering
resales of the same securities as those covered by the Registration
Statement under the securities laws of the Province of Ontario and
containing the same statements with respect to covering the resale
of such indeterminate number of additional shares of Common Stock as
may be issued upon conversion of the Debentures and exercise of the
Warrants, to the extent permitted by rules and regulations
applicable in the Province of Ontario. The number of shares of
Common Stock initially included in such Registration
Statement/Prospectus shall be no less than the sum of (A) two times
the number of Underlying Shares that are then issuable upon
conversion of the Debentures (assuming full conversion,
respectively, at the then applicable Conversion Price (as defined in
the Debentures), and (B) 100% of the Warrant Shares issuable upon
full exercise of the Warrants. Nothing in the preceding sentence
will limit the Company's obligations to reserve shares of Common
Stock pursuant to Section 3.7 of the Purchase Agreement. Thereafter
the Company shall use its best efforts to cause such Registration
Statement/Prospectus and other filings to be declared effective as
soon as possible, and in any event prior to 120 days following the
Closing Date (the "Effectiveness Deadline"). Without limiting the
foregoing, the Company will promptly respond to all comments,
inquiries and requests of the
3
Ontario Securities Commission and the SEC, and shall file and obtain
a receipt for the final Canadian Prospectus and shall cause the
Registration Statement to become effective at the earliest possible
date. The Company shall provide the Holders reasonable opportunity
to review any such Registration Statement/Prospectus or amendment or
supplement thereto prior to filing.
(ii) Prepare and file with the Ontario Securities
Commission and the SEC such amendments and supplements to such
Registration Statement/Prospectus and the prospectuses used in
connection with such Registration Statement/Prospectus as may be
necessary to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration
Statement/Prospectus and notify the Holders of the filing and
effectiveness of such Registration Statement/Prospectus and any
amendments or supplements.
(iii) Furnish to each Holder such numbers of copies of a
current prospectus conforming with the requirements of the Act,
copies of the Registration Statement/Prospectus, any amendment or
supplement thereto and any documents incorporated by reference
therein and such other documents as such Holder may reasonably
require in order to facilitate the disposition of Registrable
Securities owned by such Holder.
(iv) Register and qualify the securities covered by such
Registration Statement/Prospectus under the securities or "Blue Sky"
laws of all domestic jurisdictions, to the extent required; provided
that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
(v) Notify each Holder immediately of the happening of
any event (but not the substance or details of any such events
unless specifically requested by a Holder) as a result of which the
prospectus (including any supplements thereto or thereof) included
in such Registration Statement/Prospectus, as then in effect,
includes an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, and use its best efforts to promptly update and/or correct
such prospectus.
(vi) Notify each Holder immediately of the issuance by
the Ontario Securities Commission and the Commission or any state
securities commission or agency of any stop order (or equivalent
action) suspending the effectiveness of the Registration
Statement/Prospectus or the threat or initiation of any proceedings
for that purpose. The Company shall use its best efforts to prevent
the issuance of any stop order (or equivalent action) and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible time.
4
(vii) Permit counsel to the Holders to review the
Registration Statement/Prospectus and all amendments and supplements
thereto within a reasonable period of time (but not less than two
full Trading Days (as defined in the Debentures)) prior to each
filing and will not request acceleration (or its Canadian
equivalent) of the Registration Statement/Prospectus without prior
notice to such counsel.
(viii) List the Registrable Securities covered by such
Registration Statement/Prospectus with all securities exchange(s)
and/or markets on which the Common Stock is then listed, including,
without limitation, the American Stock Exchange, and prepare and
file any required filings with the Principal Market.
Notwithstanding anything to the contrary in this Agreement, the Company shall
not be required to file or maintain the effectiveness of a Canadian Prospectus
following such time as the Registrable Securities are freely tradable by the
Holders without qualification by prospectus under the securities laws of the
Province of Ontario.
(b) Set forth below in this Section 2(b) are (I) events that
may arise that the Purchaser considers will interfere with the full enjoyment of
their rights under this Agreement, the Purchase Agreement, the Debentures and
the Warrants (the "Interfering Events"), and (II) certain remedies applicable in
each of these events.
Paragraphs (i) through (iii) of this Section 2(b) describe the Interfering
Events, provide a remedy to the Purchaser if an Interfering Event occurs.
Paragraph (iv) provides, inter alia, that the Purchaser has the right to
specific performance.
The preceding paragraphs in this Section 2(b) are meant to serve only as
an introduction to this Section 2(b), are for convenience only, and are not to
be considered in applying, construing or interpreting this Section 2(b).
(i) Delay in Effectiveness of Registration Statement.
(A) In the event that such Registration
Statement/Prospectus has not been declared effective by the
Effectiveness Deadline, or the Company at any time fails to
issue unlegended Registrable Securities to the extent required
by Article VI of the Purchase Agreement, then the Company
shall pay each Holder (other than (i) in the case of a
Registration Statement not declared effective, a Holder of
Registrable Securities that the Company could exclude from
registration in accordance with Section 9 and (ii) in the case
of a failure to issue unlegended certificates in accordance
with the Purchase Agreement, a Holder that is not a party to,
including as a permitted assignee bound to, the Purchase
Agreement) a Monthly Delay Payment (as defined below) with
respect to each successive 30-day period (or portion thereof
appropriately prorated) thereafter that effectiveness of the
Registration Statement is delayed or failure to issue such
unlegended Registrable Securities persists.
5
(B) Subject to subsection (C)(II) below, as used in this
Agreement, a "Monthly Delay Payment" shall be a cash payment
equal to 1.5% of the amount equal to (x) the Conversion Price
multiplied by (y) the sum of the number of Underlying Shares
that are Registrable Securities and held by the applicable
Holder plus the number of Underlying Shares issuable upon
conversion of Debentures held by such Holder. Payment of the
Monthly Delay Payments shall be due and payable from the
Company to such Holder on the later of (I) the end of the
applicable 30-day period or portion thereof and (II) five
business days after demand therefor. At the option of the
Holder, Monthly Delay Payments may be added to the outstanding
Principal Amount of the Debentures held by it.
(C) Notwithstanding the foregoing, there shall be
excluded from the calculation of the number of days that the
Registration Statement has not been declared effective the
delays which are solely attributable to delays in the
Purchaser providing information required for the Registration
Statement.
(ii) No Listing; Suspension of Class of Shares
(A) In the event that the Company fails, refuses or for
any other reason is unable to cause the Registrable Securities
covered by the Registration Statement/Prospectus to be listed
(subject to issuance) with the Principal Market or one of the
other Approved Markets (as defined in the Purchase Agreement)
at all times during the period ("Listing Period") from the
date ("Effectiveness Commencement Date") which is the earlier
of the effectiveness of the Registration Statement /
Prospectus and the 120th day following the Closing Date until
such time as the registration period specified in Section 5
terminates, then the Holder shall have available the remedy
set forth in Section 4(a) of the Debentures.
(B) In the event that shares of Common Shares of the
Company are not listed on the Principal Market at all times
following the Closing Date, or are otherwise suspended from
trading and remain unlisted or suspended for three consecutive
days, then the Holder shall have available the remedy set
forth in Section 4(a) of the Debentures.
(iii) Blackout Periods. In the event the Registration
has become effective and, afterwards, any Holder's ability to sell
Registrable Securities under the Registration Statement/Prospectus
is suspended for more than (i) 15 days in any 90-day period or (ii)
30 days in any calendar year ("Suspension Grace Period"), including,
without limitation, by reason of any suspension or stop order with
respect to the Registration Statement/Prospectus or the fact that an
event has occurred as a result of which the prospectus (including
any supplements thereto) included in such Registration
Statement/Prospectus then in effect includes an untrue statement of
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light
6
of the circumstances then existing (a "Blackout"), then the Company
shall provide to each Holder a Monthly Delay Payment for each 30-day
period or portion thereof (appropriately prorated) from and after
the expiration of the Suspension Grace Period, on the terms set
forth in Section 2(b)(i)(B) above.
(iv) Cumulative Remedies. The Monthly Delay Payments
provided for above are in addition to and not in lieu or limitation
of any other rights the Holders may have at law, in equity or under
the terms of the Debentures, the Warrants, the Purchase Agreement
and this Agreement, including without limitation, the right to
monetary contract damages and specific performance; provided, that,
(x) no holder of Debentures may collect default interest in addition
to Monthly Delay Payments and (y) no holder of Debentures may
collect more than one Monthly Delay Payment with respect to the same
30-day period or portion thereof. Each Holder shall be entitled to
specific performance of any and all obligations of the Company in
connection with the registration rights of the Holders hereunder.
(c) If the Holder(s) intend to distribute the Registrable
Securities by means of an underwriting, the Holder(s) shall so advise the
Company. Any such underwriting may only be administered by nationally or
regionally recognized investment bankers reasonably satisfactory to the Company.
(d) The Company shall enter into such customary agreements for
secondary offerings (including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other reasonable actions
reasonably requested by the Holders in connection with any underwritten offering
or when the Ontario Securities Commission or the SEC has required that the
Holders be identified as underwriters in the Registration Statement in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection:
(i) make such representations and warranties to the
Holders and the underwriter or underwriters, if any, in form,
substance and scope as are customarily made by issuers to
underwriters in secondary offerings;
(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions of
independent counsel to the Company, on and dated as of the effective
day (or in the case of an underwritten offering, dated the date of
delivery of any Registrable Securities sold pursuant thereto) of the
Registration Statement/Prospectus, and within ninety (90) days
following the end of each fiscal year thereafter, which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the Holders and the underwriter(s), if any, and
their counsel and covering such matters that are customarily given
to underwriters in underwritten offerings, addressed to the Holders
and each underwriter, if any;
(iii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement/Prospectus (and, in the
case of an
7
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), and at the beginning of each
fiscal year following a year during which the Company's independent
certified public accountants shall have reviewed any of the
Company's books or records, a "comfort" letter from the Company's
independent certified public accountants addressed to each
underwriter (including the Holders, if the Ontario Securities
Commission or the SEC has required them to be identified as
underwriters in the Registration Statement), if any, to the extent
requested by such underwriters, stating that such accountants are
independent public accountants within the meaning of the Securities
Act and the applicable published rules and regulations thereunder,
and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the
independent certified public accountants delivered in connection
with secondary offerings; such accountants shall have undertaken in
each such letter to update the same during each such fiscal year in
which such books or records are being reviewed so that each such
letter shall remain current, correct and complete throughout such
fiscal year; and each such letter and update thereof, if any, shall
be reasonably satisfactory to such underwriters;
(iv) if an underwriting agreement is entered into, the
same shall include customary indemnification and contribution
provisions to and from the underwriters and procedures for secondary
underwritten offerings; and
(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities
being sold or the managing underwriter or underwriters, if any, to
evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement, if any.
(e) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration
Statement/Prospectus, and any attorney or accountant retained by any Holder or
underwriter, all financial and other records customary for purposes of the
Holders' due diligence examination of the Company and review of any Registration
Statement/Prospectus, all publicly filed documents filed subsequent to the
Closing, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement/Prospectus, provided
that such parties agree to keep such information confidential. Notwithstanding
the foregoing, the foregoing right shall not extend to any Holder (i) who is not
a financial investor or entity or (ii) who, itself or through any affiliate, has
any strategic business interest that would reasonably be expected to be in
conflict with any business of the Company or its subsidiaries.
(f) Subject to Section 2(b) above and to clause (i) below, the
Company may suspend the use of any prospectus used in connection with the
Registration Statement/Prospectus only in the event, and for such period of time
as such a suspension is required by the rules and regulations of the Commission.
The Company will use reasonable best
8
efforts to cause such suspension to terminate at the earliest possible date.
This provision shall not affect the right of Holders to receive Monthly Delay
Payments pursuant to Section 2(b) above.
(g) The Company shall file a Registration Statement/Prospectus
with respect to any newly authorized and/or reserved Registrable Securities
consisting of Underlying Shares or Warrant Shares described in clause (i) of the
definition of Registrable Securities within five (5) business days. If the
Holders become entitled, pursuant to an event described in clause (ii) and (iii)
of the definition of Registrable Securities, to receive any securities in
respect of Registrable Securities that were already included in a Registration
Statement/Prospectus, subsequent to the date such Registration
Statement/Prospectus is declared effective, and the Company is unable under the
securities laws to add such securities to the then effective Registration
Statement/Prospectus, the Company shall promptly file, in accordance with the
procedures set forth herein, an additional Registration Statement with respect
to such newly Registrable Securities. The Company shall use its best efforts to
(i) cause any such additional Registration Statement/Prospectus, when filed, to
become effective under the Securities Act, and (ii) keep such additional
Registration Statement/Prospectus effective during the period described in
Section 5 below and cause such Registration Statement/Prospectus to become
effective within 60 days of that date that the need to file the Registration
Statement/Prospectus arose. All of the registration rights and remedies under
this Agreement shall apply to the registration of the resale of such newly
reserved shares and such new Registrable Securities, including without
limitation the provisions providing for default payments contained herein.
(h) The Company shall prepare and file with the Ontario
Securities Commission and the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement/Prospectus and the
prospectus used in connection with such Registration Statement/Prospectus, which
prospectus supplement is to be filed pursuant to the rules and regulations
applicable in the home jurisdiction of the Company and the Securities Act, as
may be necessary to keep such Registration Statement/Prospectus effective at all
times during the Registration Period (as defined below), and, during such
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement. In the case of amendments and supplements to a
Registration Statement/Prospectus which are required to be filed pursuant to
this Agreement (including pursuant to this Section 2) by reason of the Company
filing a periodic report (whether on an applicable form of the Ontario
Securities Commission or on Form 20-F, Form 40-F, or Form 6-K or any analogous
or successor form under the 1934 Act), the Company shall have incorporated such
report by reference into such Registration Statement, if applicable, or shall
have filed such amendments or supplements with the Ontario Securities Commission
and the SEC on the same day on which the continuous disclosure document or
periodic report which created the requirement for the Company to amend or
supplement such Registration Statement/Prospectus is filed.
(i) Each Holder agrees by its acquisition of the Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Sections 2(a)(v) or 2(a)(vi), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement/Prospectus until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration
9
Statement/Prospectus contemplated by Section 2(h), or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement/Prospectus. The Company
may provide appropriate stop orders to enforce the provisions of this paragraph.
(j) If requested by a Holder, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as a Holder reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by a Holder holding any Registrable
Securities.
3. Expenses of Registration. All Registration Expenses in connection
with any registration, qualification or compliance with registration pursuant to
this Agreement shall be borne by the Company, and all Selling Expenses of a
Holder shall be borne by such Holder.
4. Registration. The Company shall use its best efforts to remain
qualified for registration on Form F-10, ▇-▇, ▇-▇, or any comparable or
successor form or forms, or in the event that the Company is ineligible to use
such form, such appropriate form as the Company is eligible to use under the
Securities Act provided that the Company shall maintain the effectiveness of the
Registration Statement/Prospectus then in effect until such time as a
Registration Statement covering the Registrable Securities has been declared
effective by the SEC.
5. Registration Period. In the case of the registration effected by
the Company pursuant to this Agreement, the Company shall keep such registration
effective until the earlier of (a) the date on which all the Holders have
completed the sales or distribution described in the Registration
Statement/Prospectus relating thereto or, (b) until all Registrable Securities
may be sold by the Holders under Rule 144(k) (provided that the Company's
transfer agent has accepted an instruction from the Company to such effect) (the
"Registration Period"). Subject to Section 8 below, this Agreement shall be
terminated automatically without further action by any party hereto upon the
expiration of the Registration Period.
6. Indemnification.
(a) Company Indemnity. The Company will indemnify and hold
harmless each Holder, each of its officers, directors, agents, shareholders,
members and partners, and each person controlling each of the foregoing, within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder with respect to which registration, qualification or compliance has
been effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls, within the meaning of Section 15 of the Securities Act and
the rules and regulations thereunder, any underwriter, against all claims,
losses, damages and
10
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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 in light of the
circumstances under which they were made, or any violation by the Company of the
Securities Act, any applicable Canadian securities laws or any state securities
law or, any rule or regulation thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each Holder, each
of its officers, directors, agents, shareholders, members and partners, and each
person controlling each of the foregoing, each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred and as incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to a Holder to the extent that any
such claim, loss, damage, liability or expense arises out of or is based (i) on
any untrue statement or omission based upon written information furnished to the
Company by such Holder or the underwriter (if any) therefor and stated to be
specifically for use therein or (ii) the failure of a Holder to deliver at or
prior to the written confirmation of sale, the most recent prospectus, as
amended or supplemented. The indemnity agreement contained in this Section 6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, officers, agents
and partners, and each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act and the rules
and regulations thereunder, each other Holder (if any), and each of their
officers, directors and partners, and each person controlling such other
Holder(s) against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading in light of the
circumstances under which they were made, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein, and provided that the maximum amount for which such Holder shall be
liable under this indemnity shall not exceed the net proceeds received by such
Holder from the sale of the Registrable Securities pursuant to the registration
statement in question. The indemnity agreement contained in this Section 6(b)
shall not apply to amounts paid in settlement of any such claims, losses,
damages or
11
liabilities if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under
this Section 6 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at its own expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 6 except to
the extent that the Indemnifying Party is materially and adversely affected by
such failure to provide notice. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which 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. Each Indemnified Party shall furnish such
non-privileged information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
7. Contribution. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding
12
paragraphs shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the registration statement in question or
(ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall promptly furnish to the
Company such information regarding such Holder and the distribution and/or sale
proposed by such Holder as the Company may from time to time reasonably request
in writing in connection with any registration, qualification or compliance
referred to in this Agreement, and the Company may exclude from such
registration the Registrable Securities of any Holder who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The intended method or methods of disposition and/or sale (Plan of Distribution)
of such securities as so provided by such Purchaser shall be included without
alteration in the Registration Statement covering the Registrable Securities and
shall not be changed without written consent of such Holder. Each Holder agrees
that, other than ordinary course brokerage arrangements, in the event it enters
into any arrangement with a broker dealer for the sale of any Registrable
Securities through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, such Holder shall
promptly deliver to the Company in writing all applicable information required
in order for the Company to be able to timely file a supplement to the
Prospectus pursuant to the applicable rules and regulations of the Company's
home jurisdiction or Rule 424(b) under the Securities Act, as applicable, to the
extent that such supplement is legally required. Such information shall include
a description of (i) the name of such Holder and of the participating broker
dealer(s), (ii) the number of Registrable Securities involved, (iii) the price
at which such Registrable Securities were or are to be sold, and (iv) the
commissions paid or to be paid or discounts or concessions allowed or to be
allowed to such broker dealer(s), where applicable.
10. Replacement Certificates. The certificate(s) representing the
Registrable Securities held by any Purchaser (or then Holder) may be exchanged
by such Purchaser (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Registerable Securities, as reasonably requested by such Purchaser (or such
Holder) upon surrendering the same. No service charge will be made for such
registration or exchange. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss,
13
theft, destruction or mutilation of any certificates representing a Registrable
Security and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it, or upon surrender and cancellation of such certificate if
mutilated, the Company will make and deliver a new certificate of like tenor and
dated as of such cancellation at no charge to the holder.
11. Transfer or Assignment. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Purchaser by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a permitted
transferee or assignee of Debentures, Warrants or Registrable Securities, and
all other rights granted to the Purchaser by the Company hereunder may be
transferred or assigned to any permitted transferee or assignee of any
Debentures, Warrants or Registrable Securities; provided in each case that the
Company must be given written notice by the Purchaser at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights agrees in writing to be
bound by the registration provisions of this Agreement.
12. Reports Under The 1934 Act.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Holders to sell securities of the
Company to the public without registration ("Rule 144"), no later than the
Effectiveness Deadline the Company agrees to:
(a) cause there to be "current public information" available
for the Company as such term is used in Rule 144 following the earlier of 90
days following the listing on an Approved Market and 90 days following the
Effectiveness Date
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and
(c) furnish to each Holder so long as such Holder owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the Securities 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 Holders to sell such securities pursuant to Rule 144 without
registration.
13. Miscellaneous.
(a) Remedies. The Company and the Purchaser acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
14
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Jurisdiction. Each of the Company and the Purchaser (i)
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court, the New York State courts and other courts of the United States
sitting in the Borough of Manhattan, New York County, New York State for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement and (ii) hereby waives, and agrees not to assert in any such suit
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. The Company and the Purchaser consent to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this paragraph shall affect or limit any right to serve
process in any other manner permitted by law.
(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and will be deemed to have
been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.. The
addresses for such communications shall be:
to the Company:
InterOil Corporation
▇▇▇▇▇ ▇-▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
One Houston Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Esq.
If to a Purchaser, to its address and facsimile number set forth on Schedule I
hereto, with copies to such Purchaser's representatives as set forth on Schedule
I hereto, or to such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified by written
notice given to each other party five days prior to the effectiveness of such
15
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
Any party hereto may from time to time change its address for notices by giving
at least five days' written notice of such changed address to the other parties
hereto.
(d) Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
(e) Execution in Counterpart. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(f) Signatures. Facsimile signatures shall be valid and
binding on each party submitting the same.
(g) Entire Agreement; Amendment. This Agreement, together with
the Purchase Agreement, the Debentures, the Warrants and the agreements and
documents contemplated hereby and thereby, contains the entire understanding and
agreement of the parties. Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Holders who then hold at least two-thirds of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section
13(g) shall be binding upon each Holder and the Company. No such amendment shall
be effective to the extent that it applies to less than all of the holders of
the Registrable Securities. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of this Agreement unless the same consideration also is offered to all of the
parties to this Agreement.
(h) Governing Law. This Agreement and the validity and
performance of the terms hereof shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed and to
be performed entirely within such state.
(i) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.
(j) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
16
(k) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
INTEROIL CORPORATION
By:_________________________________________
Name:
Title:
MANCHESTER SECURITIES CORP.
By:_________________________________________
Name:
Title:
PORTSIDE GROWTH AND OPPORTUNITY FUND
By:_________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
18
SCHEDULE I
NAME OF PURCHASER CONTACT INFORMATION
----------------- -------------------
Manchester Securities Corp. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Kleinberg, Kaplan, ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Portside Growth & Opportunity Fund c/o Ramius Capital Group, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Provident Premier Master Fund, Ltd. c/o Gemini Investment Strategies, LLC
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ & Stachenfeld, LLP
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇