EXHIBIT 4.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into this 18th day of July, 2001, by and between Energas Resources,
Inc., a British Columbia corporation (the "Company"), and Clare L.L.C., an
Illinois limited liability company ("Clare").
BACKGROUND. Clare has agreed to purchase 2,000,000 shares of the
Company's common stock (the "Stock") and as a condition of such purchase the
Company has agreed to provide certain registration rights to Clare in
accordance with the terms set forth below.
In consideration of the purchase of the Stock and the mutual
covenants and agreements herein set forth, the parties to this Agreement
hereby agree, subject to the terms and conditions hereinafter set forth, as
follows:
1. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms shall have the following respective meanings:
COMMISSION: The Securities and Exchange Commission or any other
governmental authority at the time administering the Securities Act or the
Exchange Act.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, or
any similar or successor federal statute, and the rules and regulations of
the Commission promulgated thereunder, all as the same shall be in effect at
the time. References to a particular section of the Exchange Act shall
include a reference to the comparable section, if any, of any such similar or
successor federal statute.
PERSON: A corporation, an association, a partnership, an individual,
a joint venture, a trust or estate, an unincorporated organization, or a
government or any department or agency thereof.
REGISTRABLE SECURITIES: (i) The Stock issued to Clare and (ii) any
securities issued or issuable with respect to the Stock by way of any stock
dividend or stock split attributable to the Stock or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise of the Company. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities, unless such securities are not sold pursuant to such registration
as a result of non-compliance by the Company with this Agreement, upon (i) a
registration statement with respect to the sale of such securities shall has
been declared effective by the Commission, (ii) the securities shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of the securities shall not require registration or
qualification under the Securities Act or any similar state law then in
force, or (iii) the securities shall have ceased to be outstanding.
REGISTRATION EXPENSES: All expenses incident to the Company's
performance of or compliance with Section 2 of this Agreement, including
without limitation all registration, filing and listing or Nasdaq fees, all
fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, all messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of the
Company's independent public accountants, including without limitation the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, the fees and disbursements of
any counsel retained by the holder or holders of the Registrable Securities
being registered, premiums and other costs of policies of insurance, if any,
against liabilities arising out of the public offering of the Registrable
Securities being registered, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any, relating
to the Registrable Securities being registered.
SECURITIES ACT: The Securities Act of 1933, as amended, or any
similar or successor federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such similar or successor
federal statute.
2. REGISTRATION UNDER SECURITIES ACT.
2.1 RIGHT TO INCLUDE REGISTRABLE SECURITIES.
2.1.2 DEMAND REGISTRATION RIGHTS. Within three months
following the date of this Agreement, the Company shall prepare and
file with the Commission, on one more occasions, a registration
statement and/or such other documents, including a prospectus, and/or
any other appropriate disclosure document as may be reasonably
necessary in the opinion of both counsel for the Company and counsel
for the holder or holders of the Registrable Securities, in order to
comply with the provisions of the Securities Act, to permit the
disposition in accordance the intended method or methods of the holder
or holders of the Registrable Securities. Once such registration
statement or other disclosure document has become effective by the
Commission's order or otherwise, the Company shall continuously
maintain effectiveness of such registration statement or disclosure
document or other registration statement or disclosure document
covering the Registrable Securities.
2.1.2 PIGGY-BACK REGISTRATION RIGHTS. Omitted.
2.2 COMPANY'S RIGHT TO DELAY REGISTRATION. Omitted.
2.3 REGISTRATION PROCEDURES. The Company, as expeditiously as
possible, will:
(i) with respect to the registration of Registrable Securities
under the Securities Act prepare and file with the Commission the
requisite registration statement to effect such registration and,
thereafter, use its best efforts to cause such registration to become
effective;
(ii) prepare and file with the Commission which amendments and
supplements to the requisite registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement until such time that all of such
securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in
such registration statement;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement (A) such number of conformed copies of
such registration statement and such number of each amendment and
supplement thereto (in each case including all exhibits), (B) such
number of copies of the prospectus contained in such registration
statement (including preliminary prospectus and any summary prospectus)
and any other prospectus filed under Rule 424 under the Securities Act,
in conformity with the requirements of the Securities Act, and (C) such
other documents, as such seller may reasonably request;
(iv) register or qualify all Registrable Securities and other
securities covered by such registration statement under such other
securities or blue sky laws of each state that each seller of
Registrable Securities shall reasonably request, to keep such
registration or qualification in effect for so long as such
registration statement remains in effect (subject to Section 2.3(ii)),
and take any other action which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
states of the securities owned by such seller, except that the Company
shall not for any such purpose be required to either qualify generally
to do business as a foreign corporation, or subject itself to taxation
in any jurisdiction wherein it would not, but for the requirements of
this subsection (iv), be obligated to be so qualified or subject to
taxation or to consent to general service of process in any such
jurisdiction or to any material restrictions on the conduct of the
Company's business, or any restrictions on payments to any of the
Company's shareholders, or require
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the escrow, "lockup" or placing of any restrictions on the sale and
disposition of securities of the Company (other than as may have been
previously imposed or existed immediately before the effective date of
the registration statement under the Securities Act) held of record by
any of the Company's officers, directors, five percent or greater
shareholders or controlling Person that is not a seller of Registrable
Securities;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
to consummate the disposition of such registrable Securities;
(vi) furnish to each seller of Registrable Securities a
signed counterpart, addressed to each seller of
(A) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten offering, dated the date
of the closing under the underwriting agreement) reasonably
satisfactory in form and substance to such seller, and
(B) in the event the offering is underwritten, a
"comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten offering, dated the date of the closing under the
underwriting agreement), signed by the independent public
accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to the events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters
delivered to the underwriters in underwritten public offerings of
securities and, in the case of the accountants' letter, such other
financial matters, and, in the case of the legal opinion, such other
legal matters, as such seller or such holder or holders (or the
underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller or holder promptly prepare and furnish to such seller or
holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statement
therein not misleading in the light of the circumstances under which
they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, a
historical earnings statement covering the period of at least 12
months, but not more than 18 months, beginning with the first month of
the first full fiscal quarter after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and will furnish to
each such seller at least five business days prior to the filing hereof
a copy of any amendment or supplement to such registration statement or
prospectus and shall not file any amendment or supplement to the
registration states to which any such seller shall have reasonably
objected on the grounds that such amendment or supplement does not
comply in all material respects with the requirements of the Securities
Act or the rules or regulations thereunder;
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(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration statement; and
(x) uses its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on
which any of the Company's common stock is then listed or quoted on a
recognized quotation service which also provides quotations of the
common stock.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees, as a condition of this
Agreement, that, upon receipt of any notice form the Company of the happening of
any event of the kind described in Section 2.3(vii) hereof, (i) such holder will
forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.3(vii), (ii) such holder will promptly
deliver copies of such supplemented or amended prospectus to each purchaser or
potential purchaser to whom such holder had delivered the prospectus prior to
such supplementation or amendment, and (iii) if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
2.4 UNDERWRITTEN OFFERINGS. Omitted.
2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
covering Registrable Securities, the Company will give the holder or holders of
Registrable Securities registered under such registration statement, their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment or supplement thereto, and will give each of them such access to the
Company's books and records and such opportunities to discuss the business of
the Company with its offices and independent public accounts who have certified
its financial statements as shall be necessary, in the opinion of such holders'
and such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
2.6 INDEMNIFICATION.
2.6.1 INDEMNIFICATION BY THE COMPANY. In the event of any registration
of any securities of the Company under the Securities Act, the Company hereby
agrees and will indemnify and hold harmless the seller of any Registrable
Securities covered by such registration statement, it directors, officers,
representatives and agents, each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls such seller or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or any such director, officer, representative,
agent, underwriter or controlling Person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
securities were registered under Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will indemnify such seller and each such
director, officer, representative, agent, underwriter and controlling Person for
any legal or there expenses reasonably incurred by them in connection with
investigation or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable in any such
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case to the extent that such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with information furnished to the Company by such seller specifically
stating that it is for use in the preparation thereof; and provided further,
that the Company shall not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any Person, if
any, who controls such underwriter within the meaning of the Securities Act, in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or mission was contained in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such seller or any such director, officer, representative, agent,
underwriter or controlling Person shall survive the transfer of such securities
by such seller.
2.6.2 INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.3 hereof, that the Company shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 2.6.1 hereof) the Company, each director,
officer, representative and agent of the Company and each other Person, if any,
who controls the Company within the meaning of the Securities Act, with respect
to any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, if
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with information furnished to the Company by
such seller for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer, representative, agent, or controlling Person and shall survive the
transfer of such securities by such seller.
2.6.3 NOTICES OF CLAIMS AND PROCEDURE. Promptly after receipt by an
indemnified Person of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.6.1 or 2.6.2 hereof, such indemnified
Person will, if a claim in respect thereof is to be made against an indemnified
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified Person to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 2.6.1 or 2.6.2 hereof, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified Person, unless in such indemnified
Person's reasonable judgment a conflict of interest between such indemnified
Person and such indemnifying party may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified Person, and after notice from the indemnifying party to such
indemnified Person of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified Person for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. If, in such
indemnified Person's reasonable judgment a conflict of interest does or may
exist in respect of such claim, the indemnified Person or Persons shall the
right to select separate counsel to participate in the defense of such action on
behalf of such indemnified Person or Persons, in which case the indemnifying
party shall bear the costs of such defense. No indemnifying party shall, without
the consent of the indemnified Person, consent to the 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 Person of a
release from all liability with respect so such claim or litigation and
otherwise in form and substance satisfactory to the indemnified Person. The
indemnifying party shall not be required to indemnify any indemnified Person
against any settlement or judgment which is consented to by an indemnified
Person without the consent of the indemnified party.
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2.6.4 OTHER INDEMNIFICATION. Indemnification similar to that specified
in Sections 2.6.1, 2.6.2 and 2.6.3 hereof (with appropriate modifications) shall
be given by the Company and each seller of Registrable Securities with respect
to any required registration or other qualification of securities under federal
or sate law or regulation of any governmental authority other than the
Securities Act.
2.6.5 INDEMNIFICATION PAYMENTS. The indemnification required by this
Section 2.6 shall be made by prompt payments of the amounts thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
2.6.6 CONTRIBUTION. If any of the indemnification provisions provided
for in this Section 2.6 are determined to be unenforceable or unavailable to an
indemnified Person in respect of any claim or action, then each indemnifying
party, in lieu of indemnifying such indemnified Person, shall contribute to the
amount paid or payable by such indemnified Person as a result of such claims in
such proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party and the indemnified Person from the
registration statement, but also the relative fault of the indemnified Person
and the indemnifying party in connection with the statements or omissions which
resulted in such claim or action as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and the indemnified
Person 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 the information supplied by the
indemnifying party or by the indemnified Person and their relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
claims referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such Person in connection with investigation or
defending any action or claim. No Person guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to contribution
from any Person that is not guilty of such fraudulent misrepresentation.
2.7 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will not
effect or permit to occur any combination or subdivision of shares which would
materially adversely affect the ability of the holder of Registrable Securities
to include such Registrable Securities in any registration of its securities
contemplated by this Section 2 or the marketability of such Registrable
Securities under any such registration.
3. RULES 144 AND 144A. The Company represents, warrants to Clare that
it will file and obtain effectiveness of a registration statement pursuant to
the requirements of Section 12(g) of the Exchange Act and/or pursuant to the
requirements of the Securities Act, and will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder. The Company will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration provided by (i) Rules 144 and 144A
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended and the
Company may take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of more than a majority of the Registrable Securities at the time
outstanding; provided, however, if such amendment, action or omission to act
would adversely affect the rights of any holder of Registrable Securities, no
consent thereto shall be effective without the concurrence of each holder who
would be adversely affected thereby. Each holder of Registrable Securities at
the time or thereafter outstanding shall be bound by a consent obtained by the
Company given by the holder or holders of the Registrable Securities pursuant to
this Section 4, whether or not such Registrable Securities shall have been
marked to indicate such consent.
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5. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing, and shall be deemed to have been delivered on the
date delivered by hand or transmitted by telegram, facsimile or by similar
means, on the first day following the day when sent by recognized courier or
overnight delivery service (fees prepaid), or on the third day following the day
when deposited in the U. S. mail, registered or certified (postage prepaid),
addressed (i) if to the holder or holders of the Registrable Securities, to the
attention of each Person at the address set forth in the stock records of the
Company or such address, or to the attention of such other Person or Persons, as
the holder or holders of the Registrable Securities shall have furnished to the
Company in writing, or (ii) if to the Company, 000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx
Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, to the attention of its President, or such
other address, or to the attention of such other Person or Persons, as the
Company shall have furnished to each holder of Registrable Securities at the
time outstanding; provided, however, that any such communication to the Company
may also, at the option of the holder of Registrable Securities giving notice,
be delivered by personal delivery to any officer of the Company.
6. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the Clare shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities who has executed a copy of this Agreement
or otherwise indicated its agreement to be bound hereby.
7. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
8. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Oklahoma, without regard to principles of conflicts of laws.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement, or have caused this Agreement, or have caused this Agreement to be
executed and delivered by their respective duly authorized officers, on the date
first above written.
"Company" NERGAS RESOURCES, INC.
By: /S/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx, President
"Clare" CLARE, L.L.C.
By: /S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, Manager Member
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