Registration Rights Agreement

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 F. Fox Benton, Jr., Lizinka M. Benton, F. Fox Benton III, Lizinka C. Benton and Lucia T. Benton (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 a ...