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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 2, 1998
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AVIVA PETROLEUM INC.
(Exact name of Registrant as specified in its charter)
TEXAS 0-22258 75-1432205
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
8235 DOUGLAS AVENUE
SUITE 400 75225
DALLAS, TEXAS (Zip code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (214) 691-3464
N/A
(former address if changed since last report)
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ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
On October 2, 1998, James E. Tracey, a director of Aviva Petroleum Inc.
(the "Company"), resigned from the board of directors of the Company. The
resignation letter, including its antecedents, is filed herewith as Exhibit 17.1
and is incorporated herein by reference. According to the letter of
resignation, Mr. Tracey resigned because the Company mailed to its stockholders
a proxy statement/prospectus, dated September 8, 1998 (the "Proxy Statement"),
prior to entering into a new definitive credit facility with the Company's
lenders. The Proxy Statement, contained in a Registration Statement on Form S-4
of the Company, relates to a proposed merger (the "Merger") of Garnet Resources
Corporation ("Garnet") with and into a subsidiary of the Company pursuant to
which Garnet would become a wholly owned subsidiary of the Company. Mr. Tracey
also objected to "the failure to provide [him] with a copy of the SEC filings,
even though [he] asked on two occasions. . . ."
The Agreement and Plan of Merger dated as of June 24, 1998 among the
Company, Aviva Merger, Inc. and Garnet (the "Merger Agreement"), which governs
the Merger, provides, as stated in the Proxy Statement, that consummation of the
Merger is conditioned on the bank having made available to the Company a credit
line of $15,000,000. At the time that it approved the Merger Agreement, the
Company's board of directors authorized the officers of the Company to file the
Registration Statement and to mail the Proxy Statement to the Company's
stockholders. Given the substantial financial difficulties currently faced by
both the Company and Garnet, the officers of both companies determined that it
was in the best interests of their respective stockholders to distribute the
Proxy Statement as soon as the Registration Statement was declared effective.
Copies of a draft of the Registration Statement, including a draft of the
Proxy Statement included therein, were mailed to the directors of the Company.
Copies of the Registration Statement, as originally filed, were delivered to the
Company's U.S. directors and to the Company's London legal representative with
instructions to forward them to several persons, including Mr. Tracey (which
forward delivery to Mr. Tracey may not have occurred).
The Proxy Statement discloses the terms of the agreement in principle
between the Company and its lenders. Pending completion of a definitive credit
facility, the Company's senior lender, ING (U.S.) Capital Corporation, advanced
the sum of $760,000 to the Company on August 10, 1998 pursuant to the terms of
an amendment to its existing credit facility. Failure to consummate the Merger
by October 31, 1998 would result in an event of default under the terms of this
amendment. The Company anticipates that a definitive bank credit facility will
be executed and delivered prior to the date of the meetings of the stockholders
of the Company and Garnet (both of which are scheduled to occur on October 20,
1998).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
*17.1 Letter of resignation from James E. Tracey, dated October 2,
1998, together with initial letter of resignation dated
September 22, 1998 and letter of review of resignation position
dated September 24, 1998.
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*Filed herewith
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AVIVA PETROLEUM INC.
By: /s/ Ronald Suttill
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Name: Ronald Suttill
Title: President and Chief Executive Officer
Date: October 9, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
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*17.1 Letter of resignation from James E. Tracey, dated October 2, 1998,
together with initial letter of resignation dated September 22, 1998
and letter of review of resignation position dated September 24,
1998.
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*Filed herewith
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EXHIBIT 17.1
TO: Jay Busby - Company Secretary
FROM: Jim Tracey - Director
SUBJECT: Resignation
DATE: 2 October, 1998
NUMBER OF PAGES, INCLUDING THIS COVER PAGE: 1
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Thank you for your memorandum dated October 2. I can understand how my
memoranda may have caused confusion in your mind and offer my apologies.
Since speaking to Bill Joor I have waited a week for the latest draft facility
document to be produced to no avail. Ron's "update" dated 24 September gave no
definitive information and I was left to rely on his "guess".
I have tired of having to chase for information and I am also tired of being
promised progress if only I will wait. For your information I attach a copy of
my memorandum dated 1 March in which I first expressed my concern at how the
transaction was being progressed with inadequate regard for a formal commitment
from the bank(s).
As indicated in my resignation letter I believe that I have been mislead and, in
my opinion, the Board's resolutions on the merger have not been fully carried
out which was why I did not sign the unanimous consent to change the record date
for the special meeting of stockholders. My patience is exhausted and I ask
that you progress my resignation.
Regards,
/s/ JAMES E. TRACEY
James E Tracey
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TO: Ron Suttill
FROM: Jim Tracey
DATE: 24 September, 1998
NUMBER OF PAGES, INCLUDING THIS COVER PAGE: 1
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Thank you for your fax.
As agreed with Bill Joor on receipt of the latest draft of the facility
documentation and an update on progress, I will review my position. However,
please note that neither our conversations nor the fax details received to date
have persuaded me that I should revise my resignation letter and I remain
displeased with the attitude displayed at my legitimate concerns about the
future of the Company and my requests for information.
I am away tomorrow but will leave the fax machine on.
/s/ JAMES E. TRACEY
James E. Tracey
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TO: Ron Suttill - Chairman
Jay Busby - Secretary
FROM: Jim Tracey - Director
SUBJECT: Resignation
DATE: 22 September, 1998
NUMBER OF PAGES, INCLUDING THIS COVER PAGE: 1
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Further to my recent discussions on the telephone with Ron I have decided to
resign from the Board of Aviva with immediate effect.
I was concerned to read in the prospectus to the merger that the banking
facilities have not been formally committed by the banks involved. This is in
contrast to my understanding of what was agreed at the last Board meeting and
also to assurances I received prior to the SEC filings. Given that the merger
proposal originated from Ing Bank in February and that they were instrumental in
dictating the terms, I find this situation untenable. It seems to me
unreasonable that Ing Bank are unwilling or unable to provide greater commitment
to the Company and its shareholders at this stage, beyond issuing a term sheet.
It is with regret that I resign, especially at this juncture. However the
failure to provide me with a copy of the SEC filings, even though I asked on two
occasions, left me in ignorance about this central issue. I have consistently
stated that I would not support any proposal which did not include the provision
of adequate formal banking facilities to 31 March 1999.
Please circulate this memorandum to members of the Board and to the appropriate
authorities.
Yours,
/s/ JAMES E. TRACEY
James E. Tracey
