EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made by and among
Alliance Resources PLC, a corporation formed under the laws of England and Wales
(the "Corporation"), and ▇. ▇▇▇ ▇▇▇▇▇▇, Jr., Lizinka ▇. ▇▇▇▇▇▇, ▇. ▇▇▇ ▇▇▇▇▇▇
III, Lizinka ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (each a "Selling Shareholder"), who
hereby agree as follows:
1. Certain Definitions. As used in this Agreement:
(i) "Commission" means the Securities and Exchange Commission and
any successor agency.
(ii) "Common Equity Securities" means Ordinary Shares and any option,
warrant or right to subscribe for, acquire or purchase any Ordinary Shares,
whether or not currently exercisable, and any security redeemable into Ordinary
Shares, whether or not currently redeemable.
(iii) "Convertible Shares" means the unlisted convertible restricted
voting shares of the Corporation issued to the Selling Shareholders pursuant to
the Sale and Purchase Agreement.
(iv) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(v) "Ordinary Shares" means any stock of any class of the
Corporation which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation and which is not subject to redemption by the
Corporation (whether or not shares of such class have voting rights).
(vi) "Qualified Registrable Securities" means the Ordinary Shares
issued or that are issuable to the Selling Shareholders pursuant to the Sale and
Purchase Agreement upon conversion of any Convertible Shares. As to any
particular Qualified Registrable Securities, once issued, the securities shall
cease to be Qualified Registrable Securities when (a) a registration statement
with respect to the securities becomes effective under the Securities Act and
the securities have been disposed of in accordance with the registration
statement, (b) the securities have ceased to be outstanding, (c) the securities
have been sold pursuant to Rule 144 or Regulation S (or any successor
provisions) under the Securities Act or (d) at the time of determination of
whether the securities are Qualified Registrable Securities, the securities may
be sold by Selling Shareholder publicly without registration under the
Securities Act and free of contractual restrictions with the Corporation.
(vii) "Qualified Registration" means a registration statement of the
Corporation under the Securities Act on a form that permits the sale of
Qualified
Registrable Securities (other than a registration statement (a) on Form S-4 or
S-8, or (b) filed in connection with any financing by the Corporation that is
principally debt or preferred stock financing).
(viii) "Sale and Purchase Agreement" means that certain Sale and
Purchase Agreement dated 23 September 1998 among the Selling Shareholders and
the Corporation.
(ix) "Securities Act" means the Securities Act of 1933, as amended.
2. Registrations.
2.1 Piggyback Registration. At any time during the term of this
Agreement, whenever the Corporation proposes to register any of its Common
Equity Securities in a Qualified Registration whether or not for sale for its
own account, the Corporation will give prompt written notice ("Piggyback
Notice") to each of the Selling Shareholders of its intention to effect a
registration. Upon the written request of any Selling Shareholder made within
20 days after delivery of any Piggyback Notice (which request shall specify the
Qualified Registrable Securities requested to be included in such Qualified
Registration by Selling Shareholder), the Corporation will, subject to
subsections 2.2 and 2.3 below, use its reasonable efforts to include in the
Qualified Registration all Qualified Registrable Securities of the requesting
Selling Shareholder to permit the disposition by that Selling Shareholder of
those securities; provided, however, that (i) if, at any time after giving
written notice of its intention to register any Common Equity Securities in a
Qualified Registration and before the effective date of the registration
statement filed in connection with the Qualified Registration, the Corporation
determines for any reason not to register its Common Equity Securities, the
Corporation may, at its election, give written notice of its determination to
the Selling Shareholders and, thereupon, shall be relieved of its obligation to
register any Qualified Registrable Securities in connection with that
registration, without prejudice, however, to the future rights of the Selling
Shareholders under this Section, (ii) if the Corporation determines in its
discretion to delay the registration of the Common Equity Securities, the
Corporation shall be permitted to delay the registration of any Qualified
Registrable Securities for the same period as the delay in registering any other
Common Equity Securities, and (iii) the Corporation is not required to effect
any registration for a requesting Selling Shareholder pursuant to this
subsection 2.1 unless it receives reasonable assurances that the requesting
Selling Shareholder will pay any expenses required to be paid by it as provided
in subsection 4.1. The registrations requested pursuant to this subsection 2.1
are referred to herein as the "Piggyback Registrations."
2.2 Priority on Piggyback Registrations. If a Piggyback Registration is
an underwritten registration and the managing underwriter(s) for the offering
advises the Corporation in writing that in its opinion the number of shares of
Qualified Registrable Securities requested or proposed to be included in the
registration exceeds the number that can be sold in the offering without
materially affecting the offering price of the securities proposed to be
included in the offering, the Corporation will include in such registration,
first, any Common Equity Securities proposed to be sold by the Corporation
pursuant to the registration, and second, to the extent the Qualified Equity
Securities of the Selling
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Shareholders and the Common Equity Securities of any other shareholders may be
included in the Qualified Registration without materially affecting the offering
price thereof, in the opinion of such managing underwriter(s), the Qualified
Registrable Securities requested by any Selling Shareholders to be included in
such Piggyback Registration pursuant to subsection 2.1 and any other securities
of the Corporation held by persons other than Selling Shareholder having rights
to participate in such Piggyback Registration, pro rata among all such holders
on the basis of the total number of shares of securities of the Corporation,
including Qualified Registrable Securities, requested by each such holder to be
included therein.
2.3 Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Corporation will have the sole right to select the
managing underwriter(s) thereof.
2.4 Relative Rights With Other Holders. The rights of Selling Shareholder
with respect to Piggyback Registrations shall be pari passu with the piggyback
registration rights of other holders of Common Equity Securities.
3. Registration Procedures. If and whenever the Corporation is required by
the provisions of this Agreement to use its reasonable efforts to effect the
registration of any Qualified Registrable Securities:
3.1 Covenants by Corporation. The Corporation shall, as expeditiously as
reasonably practicable:
(i) Prepare and file with the Commission under the Securities Act a
registration statement with respect to the Qualified Registrable Securities, and
use its reasonable efforts to cause such registration statement to become
effective and to remain effective as provided in this Agreement; provided,
however, that the Corporation may discontinue any registration of securities
that is being effected pursuant to subsection 2.1 at any time prior to the
effective date of the registration statement relating thereto.
(ii) Prepare and file with the Commission such amendments and
supplements, if any, to the registration statement and the prospectus included
in the registration statement as may be necessary to (a) keep the registration
statement effective until the earlier of 90 days after its effectiveness or the
completion of the distribution under the registration statement, and (b) comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all Qualified Registrable Securities covered by the registration
statement during that period in accordance with the intended methods of
disposition by the Selling Shareholders.
(iii) Furnish to any Selling Shareholder participating in the
registration and the underwriter, if any, the number of copies of the
registration statement (including exhibits), each amendment and supplement
thereto, the prospectus included in the registration statement (including each
preliminary prospectus) and of each amendment and supplement thereto as the
Selling Shareholder and its underwriter may reasonably request in order to
facilitate the
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public disposition of the Qualified Registrable Securities owned by the Selling
Shareholder and included in the registration statement.
(iv) Use its reasonable efforts to (a) register or qualify the
Qualified Registrable Securities under the securities or blue sky laws of any
jurisdictions as any Selling Shareholder participating in the registration or
the underwriter reasonably requests, (b) keep the registration and qualification
in effect for so long as the registration statement is in effect, and (c) do any
and all other acts and things that may be reasonably necessary or advisable to
enable the Selling Shareholder to complete the disposition in such jurisdictions
of the relevant Qualified Registrable Securities (provided that the Corporation
will not for any such purpose be required to (1) qualify generally to do
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for the requirements of this subsection;
(2) subject itself to taxation in any such jurisdiction; (3) consent to general
service of process in any such jurisdiction; or (4) register or qualify
Qualified Registrable Securities or take any other action under the state
securities or "Blue Sky" laws of any jurisdiction if, in the judgment of the
Board of Directors of the Corporation, the consequences of the registration,
qualification or other action would be unduly burdensome to the Corporation).
(v) At any time when a prospectus relating to the registration
statement is required to be delivered under the Securities Act, notify any
Selling Shareholder participating in the registration when it becomes aware of
the happening of any event as a result of which the prospectus (as then amended
or supplemented) contains any untrue statement of a material fact or omits any
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, and, at the request of the Selling
Shareholder, as promptly as practicable thereafter, prepare in sufficient
quantities and furnish to the Selling Shareholder and the underwriter a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to the offerees or purchasers of the Qualified Registrable
Securities, the prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein in light
of the circumstances then existing not misleading.
(vi) Comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve consecutive months beginning with the first day of the Corporation's
first calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
(vii) Use its reasonable efforts to cause all Qualified Registrable
Securities covered by the registration statement to be listed on any securities
exchange, if any, on which similar securities issued by the Corporation are then
listed, if the listing of the Qualified Registrable Securities is then permitted
under the rules of the exchange.
(viii) Enter into customary agreements relating to the registration
(including an underwriting agreement in customary form if the registration is in
connection with an underwritten offering).
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(ix) Subject to the execution of confidentiality agreements in a
form satisfactory to the Corporation, make reasonably available for inspection
by the Selling Shareholder, any underwriter participating in any disposition
pursuant to the registration statement and any legal counsel, accountant or
other agent retained by any underwriter, all financial and other records,
pertinent corporate documents and properties of the Corporation, and cause the
Corporation's directors, officers, employees, counsel and independent public
accountants to supply all information reasonably requested by, and to respond to
inquiries from, the Selling Shareholder, any such underwriter, legal counsel,
attorney, accountant or agent in connection with such registration statement, in
each case, to the extent that information is reasonably necessary to satisfy any
of its obligations under applicable law.
(x) Use reasonable efforts to obtain an appropriate opinion from
counsel for the Corporation and a "cold comfort" letter from the Corporation's
independent public accountants, each in customary form and covering matters of
the type customarily covered by opinions of counsel and cold comfort letters in
similar registrations; provided, however, that failure to provide such opinion
or letter, or the provision of any such opinion or letter in a form not
satisfactory to the Selling Shareholders, notwithstanding the Corporation's
reasonable efforts, shall not give rise to any action, at law or in equity, for
damages or injunctive or other relief, but rather shall only entitle the Selling
Shareholders to withdraw its Qualified Registrable Securities from the
registration statement, pursuant to subsection 3.3 below.
(xi) Provide (a) any Selling Shareholder participating in the
registration, (b) the underwriter or underwriters (which term, for purposes of
this Agreement, shall include any person deemed to be an underwriter within the
meaning of Section 2(11) of the Securities Act), if any, of the securities being
sold, and (c) counsel for the underwriters the opportunity to participate in the
preparation of the registration statement, each prospectus included therein or
filed with the Commission, and each amendment or supplement thereto.
(xii) Promptly notify any Selling Shareholder participating in the
registration and the underwriter, if any, and (if requested by any such person)
confirm the advice in writing, (a) when the registration statement, the
prospectus or any prospectus supplement or post-effective amendment has been
filed, and, when the registration statement or any post-effective amendment
thereto has become effective, (b) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose, or (c) of the receipt by the
Corporation of any notification with respect to the suspension of the
qualification of the Qualified Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose.
(xiii) Use its reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement hereunder or any
post-effective amendment thereto at the earliest practicable date.
(xiv) Notify in writing the Selling Shareholders of any proposal by
the Corporation to amend or waive any provision of this Agreement pursuant to
subsections 8.2 and 8.3 and of any amendment or waiver effected pursuant to
those subsections, each of
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which notices shall contain the text of the amendment or waiver proposed or
effected, as the case may be.
3.2 Certain Agreements by the Selling Shareholders.
(i) Each of the Selling Shareholders agrees that upon receipt of any
notice from the Corporation of the happening of any event of the kind described
in subsection 3.1(v), the Selling Shareholder will immediately discontinue its
disposition of Qualified Registrable Securities pursuant to the registration
statement covering its Qualified Registrable Securities until its receipt of the
copies of the supplemented or amended prospectus contemplated by subsection
3.1(v) and, if so directed by the Corporation, will deliver to the Corporation
(at the Corporation's expense) all copies, other than permanent file copies,
then in its possession of the prospectus covering the Qualified Registrable
Securities that was in effect at the time of receipt of the notice. If the
Corporation gives any such notice, the period mentioned in subsection
3.1(ii)(a)(1) shall be extended by the number of days during the period from and
including the date of the giving of the notice to and including the date when
Selling Shareholder receives the copies of the supplemented or amended
prospectus contemplated by subsection 3.1(v).
(ii) Each of the Selling Shareholders agrees that upon receipt of a
notice from the Corporation that it has filed and caused to become effective a
registration statement that includes an offering of Common Equity Securities for
sale by the Corporation to the public in an underwritten public offering, if the
Selling Shareholder was given the opportunity to include its Qualified
Registrable Securities for sale in the public offering, the Selling Shareholder
shall enter into agreements with the underwriters of the public offering,
substantially in the same form as agreements entered into by the officers and
directors of the Corporation, precluding the sale of Ordinary Shares by the
Selling Shareholder for a period not to exceed 180 days following the notice.
3.3 Withdrawal. If any Selling Shareholder disapproves of the terms of
any offering, the Selling Shareholder's sole remedy shall be, at its sole
discretion, to withdraw its Qualified Registrable Securities and other
securities of the Corporation from the offering by written notice to the
Corporation and the underwriter (if any); and the Selling Shareholder's
Qualified Registrable Securities and other securities of the Corporation
withdrawn from the offering will also be withdrawn from registration.
3.4 Information. The Corporation may require each Selling Shareholder to
furnish the Corporation such information regarding the Selling Shareholder and
the distribution of its securities as the Corporation may from time to time
reasonably request in writing for purposes of preparation of the registration
statement, to the extent that the information is required to comply with
applicable legal requirements.
4. Registration Expenses.
4.1 Responsibility for Payment. Whether or not any registration pursuant
to this Agreement becomes effective, all expenses incident to the Corporation's
performance of or
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compliance with this Agreement, including without limitation all registration
and filing fees, National Association of Securities Dealers' fees, fees and
expenses of compliance with state securities or blue sky laws, printing and
engraving expenses and fees and disbursements of counsel for the Corporation and
the independent certified public accountants for the Corporation, underwriters
(excluding discounts, commissions and transfer taxes attributable to securities
offered by the Selling Shareholders and amounts to be borne by the underwriters)
and other persons retained by the Corporation (all such expenses being herein
called "Corporation Registration Expenses"), will be borne by the Corporation,
and all expenses incident to the Selling Shareholders' performance of or
compliance with this Agreement, including without limitation all fees and
disbursements of counsel for the Selling Shareholders and the discounts,
commissions and transfer taxes attributable to securities offered by the Selling
Shareholders, will be borne by the Selling Shareholders; provided, however, that
(i) if the Selling Shareholders are required to pay any Registration Expenses as
provided in subsection 4.2, then the Selling Shareholders shall pay the
Registration Expenses in the proportion to (a) the number of shares of Qualified
Registrable Securities requested to be registered by the Selling Shareholder in
the registration statement if the registration does not become effective, or (b)
the number of shares of Qualified Registrable Securities of the Selling
Shareholder included in the registration statement, if the registration
statement becomes effective, unless in either case another basis of sharing the
Registration Expenses is required under applicable laws, rules or regulations,
in which case such other method shall apply; and (ii) the Selling Shareholder
shall pay any underwriting discounts and selling commissions and transfer taxes
applicable to Qualified Registrable Securities sold by Selling Shareholder.
4.2 Legal Requirements. Notwithstanding anything herein to the contrary,
Selling Shareholder shall pay the Registration Expenses to the extent required
by applicable law.
5. Indemnification.
5.1 Indemnification by the Corporation. The Corporation agrees to
indemnify and hold harmless, to the full extent permitted by law, each Selling
Shareholder, its directors, officers, employees and agents (and the directors,
officers, employees and agents thereof) and each other person or entity who
controls the Selling Shareholder within the meaning of the Securities Act
(collectively, the "Selling Shareholder Indemnitees" and individually a "Selling
Shareholder Indemnitee") against all losses, claims, damages, liabilities and
expenses, joint or several (including reasonable fees of counsel and any amounts
paid in settlement effected with the Corporation's consent, which consent shall
not be unreasonably withheld), to which any such Selling Shareholder Indemnitee
may become subject under the Securities Act, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof), are caused by
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which such Qualified Registrable
Securities were included or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary, final or summary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if the Corporation shall have filed with the Commission any
amendment or supplement), or
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the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein in the light
of the circumstances under which they were made not misleading, or (iii) any
violation by the Corporation of any federal, state or common law rule or
regulation applicable to the Corporation and relating to action of or inaction
by the Corporation in connection with any registration statement; and in each
case the Corporation will reimburse each Selling Shareholder Indemnitee for any
reasonable legal or any other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, that the Corporation shall not be
liable to any such Selling Shareholder Indemnitee in any case to the extent that
any loss, claim, damage, liability or expense (or action or proceeding, whether
commenced or threatened, in respect thereof) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the registration statement or amendment or supplement or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Corporation by or on behalf of any Selling
Shareholder relating to a Selling Shareholder for use in the preparation
thereof; and provided further that the Corporation shall not be liable to any
Selling Shareholder Indemnitee with respect to any preliminary prospectus to the
extent that any loss, claim, damage, liability or expense of the Selling
Shareholder Indemnitee results from the fact that a Selling Shareholder sold
Qualified Registrable Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of the sale, a copy of the
prospectus (excluding documents incorporated by reference) or of the prospectus
as then amended or supplemented (excluding documents incorporated by reference)
if the Corporation has previously furnished copies thereof to the Selling
Shareholder in compliance with Section 3 of this Agreement and the loss, claim,
damage, liability or expense of the Selling Shareholder Indemnitee results from
an untrue statement or omission of a material fact contained in such preliminary
prospectus which was corrected in the prospectus (or the prospectus as amended
or supplemented). Such indemnity and reimbursement of expenses shall remain in
full force and effect regardless of any investigation made by or on behalf of
any Selling Shareholder and shall survive the transfer of such securities by any
Selling Shareholder.
5.2 Indemnification by the Selling Shareholders. Each Selling Shareholder
agrees, jointly and severally, to indemnify and hold harmless, to the fullest
extent permitted by law, the Corporation, its directors, officers, employees and
agents and each Person who controls the Corporation (within the meaning of the
Securities Act) (collectively, the "Corporation Indemnitees" and individually a
"Corporation Indemnitee") against all losses, claims, damages, liabilities and
expenses, joint or several (including reasonable fees of counsel and any amounts
paid in settlement effected with any Selling Shareholder's consent, which
consent shall not be unreasonably withheld) to which any Corporation Indemnitee
may become subject under the Securities Act, at common law or otherwise insofar
as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) are caused by
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which any of the Qualified
Registrable Securities were included or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary, final or
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summary prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if the Corporation shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading to the extent, but only
to the extent, in the cases described in clauses (i) and (ii), that such untrue
statement or omission is contained in any information furnished in writing by
any Selling Shareholder relating to any Selling Shareholder for use in the
preparation thereof and if the Corporation does not know, at the time the
information is included in the registration statement, prospectus, preliminary
prospectus, amendment or supplement, that the information is false or
misleading, (iii) any violation by any Selling Shareholder of any federal, state
or common law, rule or regulation applicable to any Selling Shareholder and
relating to action of or inaction by any Selling Shareholder in connection with
any registration statement, and (iv) with respect to any preliminary prospectus,
the fact that any Selling Shareholder sold Qualified Registrable Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of the sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if (a) the Corporation has
previously furnished copies thereof to the Selling Shareholder in compliance
with Section 3 of this Agreement and (b) the loss, claim, damage, liability or
expense of the Corporation Indemnitee results from an untrue statement or
omission of a material fact contained in the preliminary prospectus which was
corrected in the prospectus (or the prospectus as amended or supplemented).
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Corporation (except as provided above)
or any Selling Shareholder and shall survive the transfer of the securities by
any Selling Shareholder.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
indemnified party under subsection 5.1 or 5.2 above of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for indemnification may be made
pursuant to this Section 5, the indemnified party shall, if a claim in respect
thereto is to be made against an indemnifying party, give written notice to the
indemnifying party of the threat or commencement thereof; but the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have to any indemnified party except to the extent that the indemnifying
party is actually prejudiced by the failure to give notice. In case any such
claim or action referred to under subsections 5.1 or 5.2 shall be brought
against any indemnified party and it shall notify the indemnifying party of the
threat or commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to the indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party). After notice from the indemnifying party to such indemnified party of
its election so to assume the defense of any such claim or action, the
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of counsel or any other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation unless the indemnifying party has failed
to assume the defense of such claim or action or to employ
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counsel reasonably satisfactory to such indemnified party. The indemnifying
party shall not be required to indemnify the indemnified party with respect to
any amounts paid in settlement of any action, proceeding or investigation
entered into without the written consent of the indemnifying party which consent
shall not be unreasonably withheld. No indemnifying party will consent to the
entry of any judgment or enter into any settlement without the consent of the
indemnified party, unless (i) such judgment or settlement does not impose any
obligation or liability upon the indemnified party other than the execution,
delivery or approval thereof, and (ii) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim for
all persons that may be entitled to or obligated to provide indemnification or
contribution under this Section 5.
5.4 Additional Indemnification. Indemnification similar to that specified
in the preceding subsections of this Section 5 (with appropriate modifications)
shall be given by the Corporation and the Selling Shareholders with respect to
any required registration or other qualification of securities under any state
securities or blue sky laws.
5.5 Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsections 5.1 or 5.2 above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to in subsections 5.1 or 5.2 in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements, omissions,
actions or inactions which resulted in such losses, claims, damages, liabilities
or expenses. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, any action or
inaction by any such party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement, omission,
action or inaction. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above in this subsection 5.5 shall be deemed to
include any reasonable legal or other expenses incurred by such indemnified
party in connection with investigating or defending any such action or claim
(which shall be limited as provided in subsection 5.3 if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this subsection 5.5. 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. Promptly after receipt by an
indemnified party under this subsection 5.5 of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for contribution may be made
against an indemnifying party under this subsection 5.5, such indemnified party
shall, if a claim for contribution in respect thereto is to be made against an
indemnifying party, give written notice to the indemnifying party in writing of
the commencement thereof (if the notice specified in subsection 5.3 has not been
given with respect to such action); but the failure to so to notify
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the indemnifying party shall not relieve it from any obligation to provide
contribution that it may have to any indemnified party under this subsection 5.5
except to the extent that the indemnifying party is actually prejudiced by the
failure to give notice. Notwithstanding anything in this subsection 5.5 to the
contrary, no indemnifying party (other than the Corporation) shall be required
pursuant to this subsection 5.5 to contribute any amount that exceeds the amount
by which the dollar amount of the proceeds received by such indemnifying party
from the sale of Qualified Registrable Securities and other securities of the
Corporation (after deducting any underwriting commissions, discounts and
transfer taxes applicable thereto) in the offering to which the losses, claims,
damages, liabilities or expenses of the indemnified parties relate exceeds the
amount of any losses, claims, damages, liabilities and expenses that the
indemnifying party has otherwise been required to pay as indemnity or
contribution hereunder by reason of such losses, claims, damages, liabilities or
expenses.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this subsection 5.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
If indemnification is available under this Section 5, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
subsections 5.1 and 5.2 without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this subsection 5.5. The provisions of this subsection 5.5
shall be in addition to any other rights to indemnification or contribution that
any indemnified party may have pursuant to law or contract and shall remain in
full force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the transfer of securities by any such
party.
5.6 Indemnification and Contribution of Underwriters. In connection with
any underwritten offering contemplated by this Agreement which includes a
Selling Shareholder's Qualified Registrable Securities, the Corporation and the
Selling Shareholder will agree to customary provisions for indemnification and
contribution (consistent with the other provisions of this Section 5) in respect
of losses, claims, damages, liabilities and expenses of the underwriters of such
offering.
6. Participation in Underwritten Registrations. In the case of a registration
hereunder, if the Corporation has determined to enter into an underwriting
agreement in connection therewith, all shares of Qualified Registrable
Securities to be included in such registration shall be subject to the
underwriting agreement, which shall be in customary form and contain such terms
as are customarily contained in such agreements, and the Selling Shareholders
may not participate in any such registration unless the Selling Shareholder (a)
agrees to sell its securities on the basis provided in any underwriting
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of the underwriting arrangements.
7. Rights to Withdraw From Registration. If, as a result of the proration
provisions of subsection 2.2, a Selling Shareholder is not entitled to include
all Qualified Registrable
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Securities in a registration that the Selling Shareholder has requested to be
included, the Selling Shareholder may elect to withdraw its request to include
Qualified Registrable Securities in the registration (a "Withdrawal Election");
provided, however, that a Withdrawal Election shall be irrevocable and, after
making a Withdrawal Election, the Selling Shareholder shall no longer have any
right to include Qualified Registrable Securities in the registration as to
which the Withdrawal Election was made.
8. Miscellaneous.
8.1 Termination. This Agreement and all rights and obligations hereunder
with respect to any Qualified Registrable Securities (except for the
indemnification and contribution rights provided in Section 5 which shall
survive forever) will terminate on the tenth anniversary of the date of this
Agreement.
8.2 Waivers. None of the rights of either party hereto may be waived
except in writing.
8.3 Amendments. Except as otherwise provided herein, this Agreement may
be amended only with the written consent of the Corporation and the Selling
Shareholders.
8.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective permitted (as
provided in subsection 8.5(ii)) successors and assigns of the parties hereto,
whether so expressed or not.
8.5 Subsequent Holders; After-Acquired Qualified Registrable Securities.
(i) The terms "Qualified Registrable Securities" and "Common Equity
Securities" do not include any Common Equity Securities acquired by Selling
Shareholder otherwise than pursuant to the Sale and Purchase Agreement.
(ii) The Selling Shareholders' rights under this Agreement are not
assignable, except to other persons named as Selling Shareholders in this
Agreement.
8.6 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
8.7 Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counter parts taken together will constitute one and the
same Agreement.
8.8 Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and shall not limit or otherwise affect the
meaning hereof.
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8.9 GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO WILL
BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF TEXAS.
8.10. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when actually delivered to the
recipient by special courier or personal delivery, or by certified or
registered mail, return receipt requested and postage prepaid,. Such notices,
demands and other communications will be sent to the Selling Shareholders and
the Corporation at their respective addresses indicated below:
If to the Corporation:
Alliance Resources PLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
with copies to:
Mr. W. ▇▇▇▇ ▇▇▇▇▇▇
Jenkens & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Selling Shareholders:
▇▇. ▇. ▇▇▇ ▇▇▇▇▇▇, Jr.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lizinka ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇. ▇▇▇ ▇▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Lizinka ▇. ▇▇▇▇▇▇
1726 Deloz
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
in each case with copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
8.11. Benefit of Agreement. No person not a party to this Agreement shall
have rights under this Agreement as a third party beneficiary or otherwise.
8.12. Changes in Outstanding Securities. The provisions of this Agreement
regarding Common Equity Securities and Qualified Registrable Securities shall
apply to securities of the Corporation or any successor or assign of the
Corporation (whether by merger, consolidation, sale of assets or otherwise) that
may be issued in respect of, or by reason of any stock dividend, stock split,
stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of
any of such events, the definitions of Common Equity Securities and Qualified
Registrable Securities shall be appropriately modified by the Board of Directors
of the Corporation.
8.13. Exchange Act Reports. The Corporation covenants that it will timely
file the reports required to be filed by it under the Securities Act or the
Exchange Act (including but not limited to the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act) to the extent required from time to time to enable Selling
Shareholder to sell the Qualified Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 under the Securities Act. Upon the request of a Selling Shareholder,
the Corporation will deliver to the Selling Shareholder a written statement as
to whether it has complied with the requirements of this Section.
8.14. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto as to the subject matter hereof and supersedes all previous
agreements among all or some of the parties hereto, whether written, oral or
otherwise.
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8.15. Specific Performance. The parties to this Agreement acknowledge that
there may be no adequate remedy at law if any party fails to perform any of its
obligations under this Agreement, and accordingly agree that each party in
addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of any other
party under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.
8.16. Inspection. For so long as this Agreement shall be in effect, a
complete list of the names and addresses of all the holders who have
registration rights similar to those set forth in subsection 2.1 of this
Agreement shall be made available for inspection and copying on any business day
by the Selling Shareholder at the offices of the Corporation at the address
thereof set forth in subsection 8.10 above.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the ___ day of September, 1998.
ALLIANCE RESOURCES PLC
a corporation formed under the laws of England
and Wales
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
----------------------------------------------
▇. ▇▇▇ ▇▇▇▇▇▇, Jr.
----------------------------------------------
Lizinka ▇. ▇▇▇▇▇▇
----------------------------------------------
▇. ▇▇▇ ▇▇▇▇▇▇ III, either individually or by ▇.
▇▇▇ ▇▇▇▇▇▇, Jr. as Attorney-in-Fact
----------------------------------------------
Lizinka ▇. ▇▇▇▇▇▇, either individually or by ▇.
▇▇▇ ▇▇▇▇▇▇, Jr. as Attorney-in-Fact
----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, either individually or by ▇.
▇▇▇ ▇▇▇▇▇▇, Jr. as Attorney-in-Fact
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