<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14,1997
REGISTRATION NO. 333-19013
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________________________________
ALLIANCE RESOURCES PLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ENGLAND AND WALES 1311 None
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification
Number)
KINGSBURY HOUSE
15-17 KING STREET
LONDON SWIY 6QU
44 171 930 9337
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOHN A. KEENAN
1 HOUSTON CENTER
1221 MCKINNEY, SUITE 1814
HOUSTON, TEXAS 77010
(713) 650-0069
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
W. ALAN KAILER S. ERICKSON GRIMSHAW
JENKENS & GILCHRIST, PRAY, WALKER, JACKMAN,
A PROFESSIONAL CORPORATION WILLIAMSON & MARLAR
1445 ROSS AVENUE, SUITE 3200 100 WEST 5TH STREET
DALLAS, TEXAS 75202 TULSA, OKLAHOMA 74102-4218
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this registration statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
_____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered be Registered (1) per Share (2) Offering Price (2) Registration Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares 27,165,758 N/A $17,027,963 $5,160(3)
- ----------------------------------------------------------------------------------------------------------------
Warrants 3,138,846 N/A N/A N/A (4)
================================================================================================================
</TABLE>
(1) Number of shares to be issued in the transactions described herein estimated
solely for purposes of calculating the registration fee.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended. Based
on current market price of securities to be acquired by registrant, pursuant
to Rule 457(f).
(3) A registration fee of $5,160 was paid previously.
(4) No separate registration fee is required pursuant to Rule 457(g).
___________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
English law does not permit a company to indemnify a director or an officer
of the company against any liability which by virtue of any rule of law would
otherwise attach to him in respect to negligence, default, breach of duty or
breach of trust in relation to the company except liability incurred by such
director or officer in defending any legal proceeding (whether civil or
criminal, in which judgment is given in his favor or in which he is acquitted or
in certain instances where, although he is liable, a court finds that such
director or officer acted honestly and reasonably and that, having regard to all
the circumstances, he ought fairly to be excused and relief is granted by the
court.
Article 175 of the Registrant's present Articles of Association provides:
(a) Subject to the provisions of the Statutes, but without prejudice to
any indemnity to which he may otherwise be entitled, every Director or other
officer or auditor of the Company shall be indemnified out of the assets of the
Company against any liability, loss or expenditure incurred by him in defending
any proceedings, whether civil or criminal, which relate to anything done or
omitted to be done or alleged to have been done or omitted to be done by him
given in his favour or in which he is acquitted or which are otherwise disposed
of without any finding or admission of guilt or breach of duty on his part or
incurred in connection with any liability in respect of any such act or omission
or from liability to pay any amount in respect of shares acquired by a nominee
of the Company.
(b) To the extent permitted by the Statutes, the Directors may arrange
insurance cover at the cost of the Company in respect of any liability, loss or
expenditure incurred by any Director, officer or auditor of the Company in
relation to anything done or alleged to have been done as a Director, officer or
auditor.
Concurrently with the completion of the Merger, the Registrant will adopt
Amended Articles of Association.
Article 154 of the Amended Articles of Association will provide:
Subject to the provisions of the Statutes but without prejudice to any
indemnity to which the person concerned may otherwise be entitled, every person
who is or was at any time a Director or other officer or Auditor of the Company
shall be indemnified out of the assets of the Company against all costs,
charges, expenses, losses or liabilities which he may sustain or incur in or
about the actual or purported execution and/or discharge of the duties of his
office and/or the exercise or purported exercise of his powers or discretions
and/or otherwise in relation thereto or in connection therewith, including
(without prejudice to the generality of the foregoing) any liability incurred by
him in defending any proceedings, whether civil or criminal, in which judgment
is given in his favour or in which he is acquitted or in connection with any
application under section 144(3) or (4) or section 727 of the Companies Act
1985, in which relief is granted to him by the Court.
The relevant provisions of the Statues are Section 310 and Section 727 of
the Companies Act 1985 which provides:
Section 310:
(1) This section applies to any provision, whether contained in a
company's articles or in any contract with the company or otherwise, for
exempting any officer of the company or any person (whether an officer or not)
employed by the company as auditor from, or indemnifying him against, any
liability which by virtue of any rule of law would otherwise attach to him in
respect of any negligence, default, breach of duty or breach of trust of which
he may be guilty in relation to the company.
(2) Except as provided by the following subsection, any such provision is
void.
(3) This section does not prevent a company --
(a) from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
(b) from indemnifying any such officer or auditor against any
liability incurred by him --
(i) in defending any proceedings (whether civil or criminal) in
which judgment is given in his favor or his is acquitted, or
II-1
<PAGE>
(ii) in connection with any application under Section 144(3) or
(4) (acquisition of shares by innocent nominee) or Section
727 (general power to grant relief in case of honest and
reasonable conduct) in which relief is granted by the court.
Section 727:
"(1) If in any proceedings for negligence, default, breach of duty or
breach of trust against an officer of a company or a person employed by a
company as auditor (whether he is or is not an officer of the company) it
appears to the court hearing the case that that officer or person is or may be
liable in respect of the negligence, default, breach of duty or breach of trust,
but that he has acted honestly and reasonably, and that having regard to all the
circumstances of the case (including those connected with his appointment) he
ought fairly to be excused for the negligence, default, breach of duty or breach
of trust, that court may relieve him, either wholly or partly, from his
liability on such terms as it thinks fit.
(2) If any such officer or person as above-mentioned has reason to
apprehend that any claim will or might be made against him in respect of any
negligence, default, breach of duty or breach of trust, he may apply to the
court for relief; and the court on the application has the same power to relieve
him as under this section it would have had if it had been a court before which
proceedings against that person for negligence, default, breach of duty or
breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge, after hearing the evidence, may, if he is
satisfied that the defendant or defender ought in pursuance of that subsection
to be relieved either in whole or in part from the liability sought to be
enforced against him, withdraw the case in whole or in part from the jury and
forthwith direct judgment to be entered for the defendant or defender on such
terms as to costs or otherwise as the judge may think proper."
The Registrant's directors and officers are insured against certain
liabilities which they may incur in their capacity as such under a liability
insurance policy carried by the Registrant.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
The following documents are filed as a part of this registration statement.
Those exhibits previously filed and incorporated herein by reference are
identified below by asterisks.
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C> <C>
2.1* -- Agreement and Plan of Merger by and among Alliance Resources Plc,
Alliance Resources (Delaware), Inc. and LaTex Resources, Inc., dated
August 12, 1996 (attached as Appendix B to the Prospectus and Proxy
Statement included as a part of this Registration Statement).
2.2* -- Form of Proxy for Special Meeting of LaTex Resources, Inc.
2.3 -- Exchange Agreement for acquisition of Overriding Royalty between Alliance Resources Plc and Bank of America
NT & SA.
3.1* -- Memorandum of Association of Alliance Resources Plc
3.2* -- Articles of Association of Alliance Resources Plc
3.3 -- Form of Warrant Agreement relating to Warrants to be issued to Society National Bank as
Warrant Agent for holders of certain LaTex Warrants.
3.4 -- Warrant Agreement and form of Warrant to be issued to all other holders of LaTex Warrants.
3.5 -- Form of Convertible Loan Note Instrument entered into between Alliance Resources Plc and Bank of America
NT & SA
3.6 -- Registration Rights Agreement between Alliance Resources Plc and affiliate of Bank of America NT & SA.
3.7 -- Form of Articles of Association of Alliance Resources Plc to be adopted concurrently
with Merger.
5.1 -- Opinion of Ashurst Morris Crisp regarding validity of shares
8.1* -- Opinion of Jenkens & Gilchrist, a professional corporation regarding
United States federal income tax matters
8.2 -- Form of Opinion of Ashurst Morris Crisp regarding United Kingdom income tax matters (included in
their opinion filed as Exhibit 5.1)
10.1* -- Executive Service Agreement between Alliance Resources Plc and John A. Keenan dated October 15, 1996.
10.2* -- Executive Service Agreement between Alliance Resources Plc and Paul R.
Fenemore dated September 20, 1996.
10.3* -- Executive Service Agreement between Alliance Resources Plc and H. Brian
K. Williams dated December 16, 1996.
10.4 -- Second Amended and Restated Credit Agreement among LaTex Petroleum Corporation, LaTex/GOC Acquisitions,
Inc., Germany Oil Company, Alliance Resources (USA) Inc. and Source Petroleum Inc. as Borrowers and Bank of
America NT & SA as the Lender.
22.1* -- Subsidiaries
24.1* -- Consent of KPMG Audit Plc.
24.2* -- Consent of Briscoe & Burke
24.3 -- Consent of Ashurst Morris Crisp (included in their opinion filed as Exhibit 5.1).
24.4* -- Consent of Ryder Scott Company
24.5* -- Consent of Jenkens & Gilchrist, a professional corporation (included
in their opinion filed as Exhibit 8.1)
25.1 -- Power of Attorney (contained on the Signature Page of this Registration Statement).
</TABLE>
* Previously filed.
** To be filed by amendment.
II-2
<PAGE>
(b) Financial Statement Schedules
Not applicable.
(c) Reports, Opinions or Appraisals
Form of opinions of Wood Roberts LLC (attached as Appendix C to the
Proxy Statement included in this registration statement).
Item 22. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change in such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Registrant
of expenses incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(5) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A
II-3
<PAGE>
and contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(6) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to paragraph (1) immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes: (i) to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means; and (ii) to arrange or provide for a facility in the
U.S. for the purpose of responding to such requests. The undertaking in
subparagraph (i) above include information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction and the company
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on April 9, 1997.
ALLIANCE RESOURCES PLC
(Registrant)
By: JOHN A. KEENAN
-----------------------------------
John A. Keenan, Managing Director
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
JOHN A. KEENAN Managing Director April 9, 1997
- --------------
John A. Keenan
*
- -- Financial Director April 9, 1997
H. Brian K. Williams
*
- -- Director of Operations April 9, 1997
Paul R. Fenemore and Business Development
*
- -- Director April 9, 1997
Stanley Robinson
*
- -- Director April 9, 1997
Christopher Samuelson
*
- -- Chairman, Director April 9, 1997
D. Patrick Maley
*
- -- Director April 9, 1997
William Kennedy
*
- - Director April 9, 1997
Philip Douglas
</TABLE>
____________________
* By John A. Keenan, by Power of Attorney
II-6
<PAGE>
EXHIBIT 2.3
EXCHANGE AGREEMENT
This Exchange Agreement ("Agreement"), dated to be effective as of
---------
_________________ 1997, is among LATEX PETROLEUM CORPORATION, an Oklahoma
corporation ("LPC"), and GERMANY OIL COMPANY, a Delaware corporation ("GOC")
--- ---
(collectively, "ORIGINAL OWNERS"), ALLIANCE RESOURCES PLC, a public limited
---------------
company incorporated in England and Wales ("ALLIANCE"), and LASALLE STREET
NATURAL RESOURCES CORPORATION, a Delaware corporation ("LSNRC").
-----
RECITALS
--------
A. LPC, LaTex/GOC Acquisition, Inc. ("GOCA"), GOC, Alliance Resources
----
(USA) Inc. and Source Petroleum Inc. (collectively, the "Borrowers") and Bank
---------
of America National Trust and Savings Association (the "Lender") are parties to
------
that certain Second Amended and Restated Credit Agreement dated as of March 14,
1997 (as amended, the "Credit Agreement") Capitalized terms used herein and not
----------------
otherwise defined shall have the meanings given them in the Credit Agreement.
B. LaTex Resources, Inc. ("LRI") owns 100% of the issued and outstanding
---
stock of LPC, GOCA AND GOC.
C. LPC and LSNRC are parties to that certain Assignment and Conveyance of
Overriding Royalty Interest dated as of October 31, 1995 ("LPC Assignment"),
--------------
pursuant to which LPC assigned and conveyed to LSNRC certain interests in
certain oil and gas property interests located in _______________________
(collectively, the "LPC ORRI"). The LPC Assignment has been filed and recorded
--------
as set forth on Schedule I hereto.
----------
D. GOC and LSNRC are parties to that certain Assignment and Conveyance of
Overriding Royalty Interest dated as of October 31, 1995 ("GOC Assignment"),
--------------
pursuant to which GOC assigned and conveyed to LSNRC certain interests in
certain oil and gas property interests located in ______________________
(collectively, the "GOC ORRI") The GOC Assignment has been filed and recorded as
--------
set forth on Schedule II hereto.
-----------
B. LRI has entered into that certain Agreement and Plan of Merger (as
amended, the "Merger Agreement") with Alliance and Alliance Resources
----------------
(Delaware), Inc., a wholly-owned subsidiary of Alliance ("ARI"), pursuant to
---
which ARI will merge (the "Merger") with and into LRI.
------
F. Alliance, Original Owners and LSNRC have now agreed that LSNRC shall
assign to LPC and GOC all of the LPC ORRI and the GOC ORRI conveyed by the LPC
Assignment and the GOC Assignment, respectively, and have today executed and
delivered that certain Assignment and Conveyance of Overriding Royalty Interest,
a copy of which is attached hereto as Exhibit A (the "Reassignment").
--------- ------------
G. In consideration of the Reassignment, Alliance, Original Owners and
LSNRC have agreed that LSNRC shall receive from Alliance _______________________
ordinary shares of Alliance and the [(Pounds)873,281.25] nominal amount of
convertible, non-interest bearing, subordinated,
<PAGE>
unsecured loan notes 1997/2007 of Alliance consisting of [1,078,125] notes of
81p each (the "Convertible Loan Notes").
----------------------
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, Alliance, Original Owners and LSNRC agree as follows:
1. EFFECT ON REASSIGNED PROPERTIES. Original Owners and LSNRC agree that,
-------------------------------
effective as of the date hereof the LPC ORRI and the GOC ORRI reassigned by
LSNRC to LPC and GOC, respectively, pursuant to the Reassignment and the
properties burdened thereby shall be free and clear of this Agreement, the LPC
Assignment, the GOC Assignment and that certain Agreement Concerning ORRI among
the Original Owners and LSNRC.
2. STOCK AND CONVERTIBLE LOAN NOTES TO BE ISSUED. Alliance hereby agrees
---------------------------------------------
to issue to LSNRC _______________ ordinary shares and the Convertible Loan Notes
on the terms and conditions set forth in this Agreement. The ordinary shares
issued to LSNRC hereunder and the ordinary shares issuable on conversion of the
Convertible Loan Notes shall be the subject of a Registration Rights Agreement
in the form attached as Exhibit B-1 to the Credit Agreement. The Convertible
Loan Notes shall be issued to LSNRC with instruments substantially in the form
attached hereto as Exhibit B.
---------
3. AMENDMENT TO ARTICLES OF ASSOCIATION. Alliance hereby agrees to amend
------------------------------------
its Articles of Association to contain the provision set forth on Exhibit C
---------
hereto.
4. OPINION OF ENGLISH COUNSEL TO ALLIANCE. Alliance shall provide to LSNRC
--------------------------------------
an opinion from Ashurst Morris Crisp, in form and substance satisfactory to
LSNRC, as to the ordinary shares to be issued hereunder, the Convertible Loan
Notes, the Loan Note Instrument and such other matters as LSNRC may reasonably
determine necessary.
5. OTHER PROVISIONS.
-----------------
a. Successors and Assigns. The provisions hereof shall extend to, be
----------------------
binding upon and inure to the benefit of the respective heirs, personal
representatives, successors and assigns of the parties hereto.
b. Counterparts. This Agreement may be executed in any number of
------------
separate counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same agreement.
c. Governing Law. This Agreement shall be governed by and construed,
-------------
interpreted and enforced in accordance with the laws of the State of Illinois,
irrespective of its rules concerning conflict of laws.
2
<PAGE>
LPC:
LATEX PETROLEUM CORPORATION,
an Oklahoma corporation
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
GOC:
GERMANY OIL COMPANY, a Delaware corporation
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
ALLIANCE:
ALLIANCE RESOURCES PLC, a public limited company
incorporated in England and Wales
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
LSNRC:
LASALLE STREET NATURAL RESOURCES CORPORATION, a
Delaware corporation
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
3
<PAGE>
Exhibit 3.3
Dated 1997
----------------------------------------
(1) ALLIANCE RESOURCES PLC
- and -
(2) SOCIETY NATIONAL BANK
__________________
WARRANT AGREEMENT
__________________
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 0171-638-1111
Fax: 0171-972-7990
ASC/A90200030
<PAGE>
WARRANT AGREEMENT
THIS AGREEMENT dated as of . ., 1997 between Alliance Resources PLC, a company
incorporated under the laws of England and Wales (the "COMPANY") and Society
National Bank, a national banking association organised and existing under the
laws of the United States (the "WARRANT AGENT").
RECITALS
(A) The Company has determined by a resolution of its Board of Directors
(being duly empowered and authorised by the Memorandum and Articles of
Association of the Company) to issue up to 1,112,378 warrants (the
"Warrants") entitling the holder thereof, on specified subscription
dates, to subscribe for ordinary shares of 40p each in the capital of
the Company ("Common Shares", and such shares being the "Warrant
Shares") and has determined to constitute the same in the manner
hereinafter appearing.
(B) The Warrants have been created in connection with the merger of a
subsidiary of the Company and LaTex Resources Inc pursuant to an
Agreement and Plan of Merger dated 12th August 1996 (the "Merger
Agreement").
(C) The particulars subject to which the Warrants are created are set out in
this Agreement.
(D) The Company desires to provide for the issuance of warrant certificates
(the "WARRANT CERTIFICATES") representing the Warrants, upon completion
of the Merger Agreement.
(E) The Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of Warrant Certificates
and exercise of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrant Certificates and the Warrants and the respective rights and
obligations thereunder of the Company, the registered holders of the Warrant
Certificates and the Warrant Agent, the parties hereto agree as follows:-
1. DEFINITIONS
As used herein:-
1.1 "COMMON SHARES" means shares of the Company of any class, whether
now or hereafter authorised, which have the right to participate
in the distribution of earnings and assets of the Company without
limit as to amount or percentage, which as of the date hereof
consist of the Company's Ordinary shares of 40p each;
"CORPORATE OFFICE" means the place of business of the Warrant
Agent located in Dallas, Texas, or its successor (for the mailing
address of the Warrant Agent, see clause 14 hereof);
<PAGE>
"EFFECTIVE DATE" means the date on which the Merger Agreement is
completed;
"EXERCISE PERIOD" means the period commencing on the Effective
Date and ending on the Expiration Date;
"EXERCISE PRICE" means a purchase price of . per Common Share
(the "WARRANT EXERCISE PRICE");
"EXPIRATION DATE" means 5.00 p.m. Central Standard or Daylight
Time on 19 November 1997;
"REGISTERED HOLDER" means the person in whose name any Warrant
Certificate shall be registered on the books maintained by the
Warrant Agent pursuant to this agreement;
"SUBSIDIARY" means any corporation of which shares having
ordinary voting power to elect a majority of the board of
directors of such corporation (regardless of whether the shares
of any other class or classes of such corporation shall have or
may have voting power by reason of the happening of any
contingency) are at the time directly or indirectly owned by the
Company or one or more subsidiaries of the Company;
"TRANSFER AGENT" means the Company's transfer agent, Society
National Bank, or its successor;
"WARRANT" or "WARRANTS" means and includes up to 1,112,378
Warrants, each to purchase 1 Common Share;
"WARRANT SHARES" means and includes up to 1,112,378 Common Shares
and any additional Common Shares or other property which may
hereafter be issuable or deliverable on exercise of the Warrants
pursuant to clause 9 of this agreement.
2. APPOINTMENT OF WARRANT AGENT
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereafter in this
agreement, and the Warrant Agent hereby accepts such appointment and
agrees to perform the duties and obligations required of it, as such
duties and obligations are set forth herein.
3. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES
3.1 Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to subscribe one Common
Share on exercise thereof, subject to modification and adjustment as
hereinafter provided in clause 9. Warrant Certificates representing up
to an aggregate of 1,112,378 Warrants of the Company shall be executed
by the proper officers of the Company and delivered to the Transfer
Agent following the execution of this Agreement. The
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<PAGE>
Warrant Certificates will be issued and delivered by the Warrant Agent
on written order of the Company signed by its duly authorised officers.
The Warrant Agent shall deliver Warrant Certificates in required whole
number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this agreement.
3.2 Except as provided in clause 9 hereof, the Warrant Shares shall be
issued only on or after the Exercise Date (hereinafter defined) on
exercise of the Warrants or on transfer or exchange of the Warrant
Shares.
4. FORM AND EXECUTION OF WARRANT CERTIFICATES
4.1 The Warrant Certificates shall be substantially in the form attached as
exhibit "A" and may have such letters, numbers or other marks of
identification and such legends, summaries or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this agreement. The
Warrant Certificates shall be dated as of the date of issuance, whether
on initial issuance, transfer, exchange or in lieu of mutilated, lost,
stolen or destroyed Warrant Certificates.
4.2 Warrant Certificates shall be executed on behalf of the Company by its
duly authorised officers in accordance with its Articles of Association,
by manual signatures or by facsimile signatures printed thereon, and
shall have imprinted thereon a facsimile of the Company's seal. Warrant
Certificates shall be manually countersigned by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In the
event any officer of the Company who executed the Warrant Certificates
shall cease to be an officer of the Company before the date of issuance
of the Warrant Certificates or before countersignature and delivery by
the Warrant Agent, such Warrant Certificates may be countersigned,
issued and delivered by the Warrant Agent with the same force and effect
as though the person who signed such Warrant Certificates had not ceased
to be an officer of the Company.
5. EXERCISE OF WARRANTS
5.1 The Warrants shall be exercisable during the Exercise Period, beginning
on the Effective Date and continuing until the Expiration Date. A
Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of the surrender for exercise (the
"EXERCISE DATE") of the Warrant Certificate. The exercise form shall be
executed by the Registered Holder thereof or his attorney duly
authorised in writing and shall be delivered together with payment to
the Warrant Agent, in cash or by official bank or certified cheque, of
an amount in lawful money of the United Kingdom. Such payment shall be
in an amount equal to the Exercise Price per Warrant as hereinabove
defined.
5.2 The person entitled to receive the number of Warrant Shares deliverable
on such exercise shall be treated for all purposes as the holder of such
Warrant Shares as of the close of business on the Exercise Date. The
Company shall not be obligated to issue any fractional share interests
in Warrant Shares issuable on exercise of a Warrant. If more than one
Warrant shall be exercised at one time by the same Registered Holder,
the number of full shares which shall be
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issuable on exercise thereof shall be computed on the basis of the
aggregate number of full shares issuable on such exercise.
5.3 As soon as practicable on or after the Exercise Date and in any event
within 30 days after such date, the Warrant Agent shall cause to be
issued and delivered to the person or persons entitled to receive the
same, a certificate or certificates for the number of Warrant Shares
deliverable on such exercise. No adjustment shall be made in respect of
cash dividends on Warrant Shares deliverable on exercise of any Warrant.
The Warrant Agent shall promptly notify the Company in writing of any
exercise of any Warrant and of the number of Warrant Shares delivered
and shall cause payment of an amount in cash equal to the Exercise Price
to be made promptly to the order of the Company. The parties
contemplate such payments will be made by the Warrant Agent to the
Company on a weekly basis and will consist of collected funds only. The
Warrant Agent shall hold any proceeds collected and not yet paid to the
Company in a federally-insured escrow account at a commercial bank
selected by agreement of the Company and the Warrant Agent, at all times
relevant hereto. Following a determination by the Warrant Agent that
collected funds have been received, the Warrant Agent shall cause share
certificates to be issued representing the number of Warrants exercised
by the holder.
5.4 Expenses incurred by the Warrant Agent hereunder, including
administrative costs, costs of maintaining records and other expenses,
shall be paid by the Company according to the standard fees imposed by
the Warrant Agent for such services.
5.5 A detailed accounting statement setting forth the number of Warrants
exercised, the net amount of exercised funds and all expenses incurred
by the Warrant Agent shall be transmitted to the Company on payment of
each exercise amount. Such accounting statement shall serve as an
interim accounting for the Company during the Exercise Period. The
Warrant Agent shall render to the Company a complete accounting setting
forth the number of Warrants exercised, the identity of persons
exercising such Warrants, the number of shares issued, the amounts to be
distributed to the Company and all other expenses incurred by the
Warrant Agent, at the completion of the Exercise Period. COPIES OF ALL
OF THE ABOVE SHALL BE TRANSMITTED PROMPTLY TO CHELSEA STREET SECURITIES,
INC., 222 WEST LAS COLINAS BOULEVARD, SUITE 2000, IRVING, TEXAS 75039.
6. RESERVATION OF SHARES AND PAYMENT OF TAXES
6.1 The Company covenants that it will at all times keep available for issue
sufficient authorised but unissued Common Shares as shall then be
issuable on exercise of all outstanding Warrants. The Company covenants
that all Warrant Shares, when issued, shall be duly and validly issued,
fully paid and non-assessable, and free from all taxes, liens and
charges with respect to the issue thereof.
6.2 If any Warrant Shares require registration with or approval of any
government authority under any federal or state law before such shares
may be validly issued or delivered, the Company covenants it will in
good faith and as expeditiously as possible endeavour to secure such
registration or approval, as the case may be.
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<PAGE>
6.3 The Warrant holder shall pay all documentary stamp or similar taxes and
other government charges that may be imposed with respect to the
issuance of the Warrants, or the issuance, transfer or delivery of any
Warrant Shares on exercise of the Warrants. In the event the Warrant
Shares are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate, no such delivery shall be
made unless the person requesting the same has paid to the Warrant Agent
the amount of any such taxes or charges incident thereto.
6.4 The Warrant Agent is hereby irrevocably authorised to requisition
certificates for Warrant Shares from the Company's Transfer Agent as
required from time to time. The Company has, contemporaneously with the
execution of this agreement, authorised the Transfer Agent to comply
with all such requisitions. The Company will file with the Warrant
Agent a statement setting forth the name and address of its Transfer
Agent for Common Shares issuable on exercise of the Warrants and of each
successor Transfer Agent, if any.
7. REGISTRATION OF TRANSFER OF WARRANT CERTIFICATES
7.1 The Warrant Certificates may not be transferred in whole or in part
except as authorised in this agreement. Warrant Certificates to be
exchanged shall be surrendered to the Warrant Agent at its corporate
office. The Company shall execute, and the Warrant Agent shall
countersign, issue and deliver in exchange therefor, the Warrant
Certificate or Certificates which the holder making the transfer shall
be entitled to receive.
7.2 The Warrant Agent shall keep transfer books at its corporate office in
which it shall register Warrant Certificates and the transfer thereof.
On due presentment for transfer of any Warrant Certificates at such
office, the Company shall execute, and the Warrant Agent shall issue and
deliver to the transferee or transferees, a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants.
7.3 The Warrants will not be listed or traded on a securities exchange.
8. LOSS OR MUTILATION
On receipt by the Company and the Warrant Agent of evidence satisfactory
as to the ownership of and the loss, theft, destruction or mutilation of
any Warrant Certificate, the Company shall execute, and the Warrant
Agent shall countersign and deliver in lieu thereof, a new Warrant
Certificate representing an equal aggregate number of Warrants. In the
case of loss, theft or destruction of any Warrant Certificate, the
individual requesting issuance of a new Warrant Certificate shall be
required to indemnify the Company and Warrant Agent in an amount
satisfactory to each of them. In the event a Warrant Certificate is
mutilated, such certificate shall be surrendered and cancelled by the
Warrant Agent prior to delivery of a new Warrant Certificate.
Applicants for a substitute Warrant Certificate shall also comply with
such other regulations and pay such other reasonable charges as the
Company may prescribe.
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9. ADJUSTMENT OF EXERCISE PRICE AND SHARES
9.1 In the event, prior to the expiration of the Warrants by exercise or by
their terms, the Company shall issue any of its Common Shares as a stock
dividend or shall subdivide the number of outstanding Common Shares into
a greater number of shares, then, in either of such events, the Exercise
Price in effect at the time of such action shall be reduced
proportionately and the number of Common Shares purchasable pursuant to
the Warrants shall be increased proportionately. Conversely, in the
event the Company shall reduce the number of its outstanding Common
Shares by combining such shares into a smaller number of shares, then,
in such event, the Exercise Price in effect at the time of such action
shall be increased proportionately and the number of Common Shares at
that time purchasable pursuant to the Warrants shall be decreased
proportionately. Such stock dividend paid or distributed on the Common
Shares in shares of any other class of the Company or securities
convertible into Common Shares shall be treated as a dividend paid or
distributed in Common Shares to the extent Common Shares are issuable on
the payment or conversion thereof.
9.2 In the event, prior to the expiration of the Warrants by exercise or by
their terms, the Company shall be recapitalised by reclassifying its
outstanding Common Shares into shares with a different nominal value, or
by changing its outstanding Common Shares to shares without nominal
value or in the event of any other material change of the capital
structure of the Company or of any successor corporation by reason of
any reclassification, recapitalisation or conveyance, prompt,
proportionate, equitable, lawful and adequate provision shall be made
whereby any holder of the Warrants shall thereafter have the right to
purchase, on the basis and the terms and conditions specified in this
agreement, in lieu of the Common Shares of the Company theretofore
purchasable on the exercise of any Warrant, such securities or assets as
may be issued or payable with respect to or in exchange for the number
of Common Shares of the Company theretofore purchasable on exercise of
the Warrants had such reclassification, recapitalisation or conveyance
not taken place; and in any such event, the rights of any holder of a
Warrant to any adjustment in the number of Common Shares purchasable on
exercise of such Warrant, as set forth above, shall continue and be
preserved in respect of any stock, securities or assets which the holder
becomes entitled to purchase; provided, however, that a merger,
acquisition of a going business or a portion thereof (whether for cash,
stock, notes, other securities, or a combination of cash and
securities), exchange of stock for stock, exchange of stock for assets,
or like transaction involving the Company will not be considered a
"MATERIAL CHANGE" for purposes of this clause 9.2, and no adjustment
shall be made under this clause 9 by reason of any such merger,
acquisition, exchange of stock for stock, exchange of stock for assets,
or like transaction.
9.3 In the event the Company, at any time while the Warrants shall remain
unexpired and unexercised, shall sell all or substantially all of its
property, or dissolves, liquidates or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made as
part of the terms of such sale, dissolution, liquidation or winding up
such that the holder of a Warrant may thereafter receive, on exercise of
such Warrant, in lieu of each Common Share of the Company which such
holder would have been entitled to receive upon exercise of such
Warrant, the same kind and amount of any stock, securities or assets as
may be issuable,
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<PAGE>
distributable or payable on any such sale, dissolution, liquidation or
winding up with respect to each Common Share of the Company; provided,
however, that in the event of any such sale, dissolution, liquidation or
winding up, the right to exercise the Warrants shall terminate on a date
fixed by the Company, such date to be not earlier than 5.00 p.m.,
Central Time, on the 30th day next succeeding the date on which notice
of such termination of the right to exercise the Warrants has been given
by mail to the holders thereof at such addresses as may appear on the
books of the Company.
9.4 In the event, prior to the expiration of the Warrants by exercise or by
their terms, the Company shall take a record of the holders of its
Common Shares for the purpose of entitling them to purchase its Common
Shares at a price per share more than ten per cent. below the then
current market price per share (as defined below) of its Common Shares
at the date of taking such record, then (a) the number of Common Shares
purchasable pursuant to the Warrants shall be redetermined as follows:
the number of Common Shares purchasable pursuant to a Warrant
immediately prior to such adjustment (taking in account fractional
interests to the nearest 1,000th of a share) shall be multiplied by a
fraction, the numerator of which shall be the number of Common Shares of
the Company then outstanding immediately prior to the taking of such
record, plus the number of additional shares offered for purchase, and
the denominator of which shall be the number of Common Shares of the
Company outstanding immediately prior to the taking of such record, plus
the number of shares which the aggregate offering price of the total
number of additional shares so offered would purchase at such current
market price; and (b) the Exercise Price per Common Share purchasable
pursuant to a Warrant shall be redetermined as follows: the Exercise
Price in effect immediately prior to the taking of such record shall be
multiplied by a fraction, the numerator of which is the number of Common
Shares purchasable immediately prior to the taking of such record, and
the denominator of which is the number of Common Shares purchasable
immediately after the taking of such record as determined pursuant to
clause 9.4(a) above; provided, however (c) that any adjustment in the
number of shares issuable as set forth above shall be effective only to
the extent sufficient Common Shares have been registered through a
Registration Statement filed with the Securities and Exchange
Commission, and (d) that any adjustment in the Exercise Price does not
cause the Company to receive proceeds in excess of the amount authorised
by any such Registration Statement. For the purpose hereof, the current
market price per Common Share of the Company at any date shall be deemed
to be the average of the middle market price as derived from the London
Stock Exchange Daily Official List for 30 consecutive business days
commencing 15 business days prior to the record date.
9.5 On exercise of the Warrants by the holders, the Company shall not be
required to deliver fractions of Common Shares; provided, however, that
prompt, proportionate, equitable, lawful and adequate adjustment in the
Exercise Price payable shall be made in respect of any such fraction of
one Common Share on the basis of the Exercise Price per share.
9.6 In the event, prior to expiration of the Warrants by exercise or by
their terms, the Company shall determine to take a record of the holders
of its Common Shares for the purpose of determining shareholders
entitled to receive any stock dividend, distribution or other right
which will cause any change or adjustment in the number, amount, price
or nature of the Common
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<PAGE>
Shares or other stock, securities or assets deliverable on exercise of
the Warrants pursuant to the foregoing provisions, the Company shall
give to the Registered Holders of the Warrants at the addresses as may
appear on the books of the Company at least 15 days' prior written
notice to the effect that it intends to take such a record. Such notice
shall specify the date as of which such record is to be taken; the
purpose for which such record is to be taken; and the number, amount,
price and nature of the Common Shares or other stock, securities or
assets which will be deliverable on exercise of the Warrants after the
action for which such record will be taken has been completed. Without
limiting the obligation of the Company to provide notice to the
Registered Holders of the Warrant Certificates of any corporate action
hereunder, the failure of the Company to give notice shall not
invalidate such corporate action of the Company.
9.7 The Warrant shall not entitle the holder thereof to any of the rights of
shareholders or to any dividend declared on the Common Shares, unless
the Warrant is exercised and the Common Shares purchased prior to the
record date fixed by the board of directors of the Company for the
determination of holders of Common Shares entitled to such dividend or
other right.
9.8 No adjustment of the Exercise Price shall be made as a result of or in
connection with (a) the establishment of one or more employee stock
option plans for employees of the Company, or the modification, renewal
or extension of any such plan, or the issuance of Common Shares on
exercise of any options pursuant to any such plan, (b) the issuance of
individual warrants or options to purchase Common Shares, the issuance
of Common Shares upon exercise of such warrants or options, or the
issuance of Common Shares in connection with compensation arrangements
for directors, officers, employees or agents of the Company or any
Subsidiary, and the like, or (c) the issuance of Common Shares in
connection with a merger, acquisition of a going business or a portion
thereof (whether for cash, stock, notes, other securities, or a
combination of cash and securities), exchange of stock for stock,
exchange of stock for assets, or like transaction.
10. EXTENSION OF WARRANT EXERCISE PERIOD
The Warrant Exercise Period may be extended one or more times, and from
time to time, in the sole discretion of the Company and the Warrant
Agent. Any such extension shall be evidenced by a written modification
of this Warrant Agreement executed by the Company and the Warrant Agent.
Within fifteen days of the execution of any such written modification of
this Warrant Agreement, the Company shall file with the Securities and
the Exchange Commission a Post-effective Amendment to the Registration
Statement registering the Common Shares underlying the Warrants.
11. PURCHASE OR REDEMPTION OF WARRANTS BY THE COMPANY
11.1 The Warrants are redeemable upon 30 days' notice to their holders for
$.01 per Warrant. Notice of any such redemption will be mailed by the
Company to the Registered Holders of the Warrants at the addresses as
may appear on the books of the Company. Unless, prior to the expiration
of such 30-day notice period, a Registered Holder exercises his right to
purchase the
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Shares of Common Stock covered by his Warrants, such Registered Holder
will forfeit his right to do so, and will be entitled only to the
redemption price of such Warrants, if redeemed.
11.2 In the event the Company shall purchase, redeem, or otherwise acquire
Warrants, the same shall thereupon be delivered to the Warrant Agent and
be cancelled and retired by the Warrant Agent.
12. DUTIES, COMPENSATION AND TERMINATION OF WARRANT AGENT
12.1 The Warrant Agent shall act hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by
the provisions hereof. The Warrant Agent shall not, by issuing and
delivering Warrant Certificates or by any other act hereunder, be deemed
to make any representations as to the validity, value or authorisation
of the Warrant Certificates or the Warrants represented thereby or of
the Common Shares or other property delivered on exercise of any
Warrant. The Warrant Agent shall not be under any duty or
responsibility to any holder of the Warrant Certificates to make or
cause to be made any adjustment of the Exercise Price or to determine
whether any fact exists which may require any such adjustments.
12.2 The Warrant Agent shall not (a) be liable for any recital or statement
of fact contained herein or for any action taken or omitted by it in
reliance on any Warrant Certificate or other document or instrument
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (b) be responsible for any
failure on the part of the Company to comply with any of its covenants
and obligations contained in this agreement or in the Warrant
Certificates, or (c) be liable for any act or omission in connection
with this agreement except for its own negligence or wilful misconduct.
12.3 The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken or omitted by it in good faith in
accordance with such notice, statement, instruction, request, direction,
order or demand.
12.4 Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed
by a director and attested by its secretary or assistant secretary. The
Warrant Agent shall not be liable for any action taken or omitted by it
in accordance with such notice, statement, instruction, request,
direction, order or demand.
12.5 The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse the Warrant Agent for its
reasonable expenses. The Company further agrees to indemnify the
Warrant Agent against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for any action taken or
omitted by the Warrant Agent in the execution of its duties and powers
hereunder, excepting losses, expenses and liabilities arising as a
result of the Warrant Agent's negligence or wilful misconduct.
12.6 The Warrant Agent may resign its duties or the Company may terminate the
Warrant Agent and the Warrant Agent shall be discharged from all further
duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or wilful misconduct) on 30
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days' prior written notice to the other party. At least 15 days prior to
the date such resignation is to become effective, the Warrant Agent
shall cause a copy of such notice of resignation to be mailed to the
Registered Holder of each Warrant Certificate. On such resignation or
termination, the Company shall appoint a new Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days
after it has been notified in writing of the resignation by the Warrant
Agent, then the Registered Holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a new
Warrant Agent. Any new Warrant Agent, whether appointed by the Company
or by such court, shall be a bank or trust company having a capital and
surplus, as shown by its last published report to its shareholders, of
not less than $1,000,000.
12.7 After acceptance in writing of an appointment of a new Warrant Agent is
received by the Company, such new Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; provided, however, if it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed. The Company shall
file a notice of appointment of a new Warrant Agent with the resigning
Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Holder of each Warrant Certificate.
12.8 Any corporation into which the Warrant Agent or any new Warrant Agent
may be converted or merged, or any corporation resulting from any
consolidation to which the Warrant Agent or any new Warrant Agent shall
be a party, or any corporation succeeding to the corporate trust
business of the Warrant Agent shall be a successor Warrant Agent under
this agreement, provided that such corporation is eligible for
appointment as a successor to the Warrant Agent. Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be mailed to the Company and to the Registered Holder of each
Warrant Certificate. No further action shall be required for
establishment and authorisation of such successor Warrant Agent.
12.9 The Warrant Agent, its officers or directors and its subsidiaries or
affiliates may buy, hold or sell Warrants or other securities of the
Company and otherwise deal with the Company in the same manner and to
the same extent and with like effect as though it were not the Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company.
13. MODIFICATION OF AGREEMENT
The Warrant Agent and the Company may by supplemental agreement make any
changes or corrections in this agreement they shall deem appropriate to
cure any ambiguity or to correct any defective or inconsistent provision
or mistake or error herein contained. Additionally, the parties may
make any changes or corrections deemed necessary which shall not
adversely affect the interests of the holders of Warrant Certificates;
provided, however, this agreement shall not otherwise be modified,
supplemented or altered in any respect, except with the consent in
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<PAGE>
writing of the Registered Holders of Warrant Certificates representing
not less than 66 2/3 per cent. of the Warrants outstanding; provided,
however, that no change in the number or nature of the Warrant Shares
purchasable on exercise of a Warrant, or the Exercise Price or the
Exercise Period thereof shall be made without the consent, in writing,
of the Registered Holder of the Warrant Certificate representing such
Warrant, other than such changes as are specifically prescribed by this
agreement.
14. NOTICES
All notices, demands, elections, opinions or requests (however
characterised or described) required or authorised hereunder shall be
deemed given sufficiently in writing and set by registered or certified
mail, return receipt requested and postage prepaid, or by tested telex,
telegram or cable to:-
in the case of the Company: Alliance Resources plc
Kingsbury House
15-17 King Street
London SW1Y 6QU
and, in the case of the Warrant Agent: Society National Bank
P. O. Box 2320
Dallas, Texas 75221-2320
and, if to the Registered Holder of a Warrant Certificate, at the
address of such holder as set forth on the books maintained by the
Warrant Agent.
15. PERSONS BENEFITING
This agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns,
and the holders from time to time of the Warrant Certificates. Nothing
in this agreement is intended to or shall be construed to confer on any
other person any right, remedy or claim or to impose on any other person
any duty, liability or obligation.
16. FURTHER INSTRUMENTS
The parties shall execute and deliver any and all such other instruments
and shall take any and all such other actions as may be reasonable or
necessary to carry out the intention of this agreement.
17. SEVERABILITY
If any provision of this agreement shall be held, declared or pronounced
void, voidable, invalid, unenforceable or inoperative for any reason by
any court of competent jurisdiction, government authority or otherwise,
such holding, declaration or pronouncement shall not adversely affect
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<PAGE>
any other provision of this agreement, which shall otherwise remain in
full force and effect and be enforced in accordance with its terms, and
the effect of such holding, declaration or pronouncement shall be
limited to the territory or jurisdiction in which made.
18. WAIVER
All the rights and remedies of either party under this agreement are
cumulative and not exclusive of any other rights and remedies as
provided by law. No delay or failure on the part of either party in the
exercise of any right or remedy arising from a breach of this agreement
shall operate as a waiver of any subsequent right or remedy arising from
a subsequent breach of this agreement. The consent of any party where
required hereunder to any act or occurrence shall not be deemed to be a
consent to any other act or occurrence.
19. GENERAL PROVISIONS
This agreement shall be construed and enforced in accordance with, and
governed by, the laws of England. Except as otherwise expressly stated
herein, time is of the essence in performing hereunder. This agreement
embodies the entire agreement and understanding between the parties and
supersedes all prior agreements and understandings relating to the
subject matter hereof, and this agreement may not be modified or amended
or any term or provision hereof waived or discharged except in writing
signed by the party against whom such amendment, modification, waiver or
discharge is sought to be enforced. The headings of this agreement are
for convenience of reference only and shall not limit or otherwise
affect the meaning thereof. This agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
IN WITNESS whereof this agreement has been executed on the date first above
written.
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<PAGE>
Signed by )
)
for and on behalf of ALLIANCE RESOURCES PLC )
in the presence of:- )
Signed by )
)
for and on behalf of SOCIETY NATIONAL )
BANK in the presence of:- )
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<PAGE>
CONTENTS
CLAUSE PAGE
1. DEFINITIONS........................................................ 1
2. APPOINTMENT OF WARRANT AGENT....................................... 2
3. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES...................... 3
4. FORM AND EXECUTION OF WARRANT CERTIFICATES......................... 3
5. EXERCISE OF WARRANTS............................................... 4
6. RESERVATION OF SHARES AND PAYMENT OF TAXES......................... 5
7. REGISTRATION OF TRANSFER OF WARRANT CERTIFICATES................... 5
8. LOSS OR MUTILATION................................................. 6
9. ADJUSTMENT OF EXERCISE PRICE AND SHARES............................ 6
10. EXTENSION OF WARRANT EXERCISE PERIOD............................... 9
11. PURCHASE OR REDEMPTION OF WARRANTS BY THE COMPANY.................. 9
12. DUTIES, COMPENSATION AND TERMINATION OF WARRANT AGENT.............. 10
13. MODIFICATION OF AGREEMENT.......................................... 11
14. NOTICES............................................................ 12
15. PERSONS BENEFITING................................................. 12
16. FURTHER INSTRUMENTS................................................ 13
17. SEVERABILITY....................................................... 13
18. WAIVER............................................................. 13
19. GENERAL PROVISIONS................................................. 13
<PAGE>
EXHIBIT 3.4
DATED 1997
--------------------------------------------------------
ALLIANCE RESOURCES PLC
_____________________________________
WARRANT INSTRUMENT
relating to the issue of Warrants entitling
the Warrantholder to subscribe for
Ordinary Shares of 40p each in
Alliance Resources PLC
_____________________________________
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 0171-638-1111
Fax: 0171-972-7990
ASC/PDG/A90200030
<PAGE>
THIS WARRANT INSTRUMENT is entered into by way of deed poll this . day of .
1997 by Alliance Resources Plc a company registered in England and Wales with
number 2532955 whose registered office is at Kingsbury House, 15-17 King Street,
London, SW1Y 6QU ("THE COMPANY").
WHEREAS:-
(1) The Company has determined by a Resolution of its Board of Directors (being
duly empowered and authorised by the Memorandum and Articles of Association
of the Company) to issue up to 2,026,468 Warrants each entitling the holder
thereof, on specified subscription dates, to subscribe for ordinary shares
of 40 pence each in the capital of the Company ("Ordinary Shares") and has
determined to constitute the same in the manner hereinafter appearing.
(2) The Warrants (other than the Series "G" Warrants) have been created in
connection with the merger of the Company with LaTex Resources Inc.
pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated
12th August 1996, details of such merger being set out in the listing
particulars relating to the Company dated .. 1997 (the "Listing
Particulars").
(3) The Series "G" Warrants have been created in connection with the ORRI
Acquisition (as defined in the Listing Particulars").
(4) The particulars subject to which the Warrants are created are set out in
the Schedule hereto.
NOW THIS WARRANT INSTRUMENT WITNESSES AND THE COMPANY HEREBY AGREES AND DECLARES
AS FOLLOWS:-
I. INTERPRETATION
In this Warrant Instrument, unless the context otherwise requires, the
expressions defined in the particulars of Warrants set out in the Schedule
hereto shall have the meanings thereby given.
II. WARRANTS
A. The Warrants shall be constituted as follows:-
(a) 96,729 Series "B" Warrants entitling the holders to subscribe for
Ordinary Shares at a fixed price of . pence (subject to the provisions
of the Schedule hereto) at any time prior to 16 November 1997;
(b) 68,785 Series "C" Warrants entitling the holders to subscribe for
Ordinary Shares at a fixed price of . pence (subject to the provisions
of the Schedule hereto) at any time prior to 25 January 1998;
<PAGE>
(c) 343,924 Series "D" Warrants entitling the holders to subscribe for
Ordinary Shares at a fixed price of . pence (subject to the provisions
of the Schedule hereto) at any time prior to 31 March 2001;
(d) 30,953 Series "E" Warrants entitling the holders to subscribe for
Ordinary Shares at a fixed price of . pence (subject to the provisions
of the Schedule hereto) at any time prior to 31 October 2001; and
(e) 275,139 Series "F" Warrants entitling the holders to subscribe for
Ordinary Shares at a fixed price of . pence (subject to the provisions
of the Schedule hereto) at any time prior to 16 December 2002;
(f) 1,210,938 Series "G" Warrants entitling the holders to subscribe for
Ordinary Share at a fixed price of (Pounds)1 (subject to the
provisions of the Schedule hereto) at any prior to the tenth
anniversary of the date of issue,
each of the relative final dates for exercise of a Warrant being, in
respect of the Warrants to which it relates, the "Expiry Date" and each of
the relative prices payable upon exercise of a Warrant being, in respect of
the Warrants to which it relates, the "Subscription Price".
B. The Warrants shall only be issued at such time or times as may be required
from time to time to satisfy the Company's obligations pursuant to the
Merger Agreement or in connection with the ORRI Acquisition to issue up to
96,729 Series "B" Warrants, 68,785 Series "C" Warrants, 343,924 Series "D"
Warrants, 30,953 Series "E" Warrants, 275,139 Series "F" Warrants and
1,210,938 Series "G" Warrants and shall rank pari passu in all respects and
without discrimination or preference.
III. CERTIFICATES
Every Warrant holder shall be entitled to receive one certificate for each
Series of the Warrant(s) held by him but joint holders shall be entitled to
only one certificate in respect of the Warrants held jointly by them which
certificates shall be delivered to the joint holder whose name stands first
in the Register. Every certificate shall be under the securities seal of
the Company which shall be affixed in such manner as shall be permitted by
the Articles of Association of the Company. The Company shall comply with
the terms and conditions of the Schedule hereto and the Warrants shall be
held subject to such terms and conditions all of which terms shall be
deemed to be incorporated in this Warrant Instrument and shall be binding
on the Company and the Warrant holders and all persons claiming through or
under them respectively.
IV. APPOINTMENT OF WARRANT AGENT
The Company may in its absolute discretion by Resolution of its Board of
Directors (being duly empowered and authorised by the Memorandum and
Articles of Association of the Company) appoint as agent of the Company
such person or persons as it thinks fit to act in connection with the
issue, registration, transfer and exchange or otherwise of warrants (the
"Warrant Agent"). The Company agrees that the Warrant Agent shall perform
the duties and obligations required of it in accordance with the terms and
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<PAGE>
conditions of the Schedule hereto and any other terms that the Company sees
fit and to undertake all responsibilities hereby vested for the time being
in the Company.
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<PAGE>
IN WITNESS whereof the Company has executed this Warrant Instrument as a deed
the day and year first above written.
Executed as a deed by )
Alliance Resources Plc )
acting by two of its directors/ )
one of its directors and )
its secretary )
Director
Director/Secretary
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<PAGE>
SCHEDULE
1. SUBSCRIPTION RIGHTS
(a) A registered holder (a "holder") of a Warrant shall have the right,
exercisable in accordance with paragraph 1(c) below, to subscribe
("the subscription rights") in cash on any date prior to the Expiry
Date in respect of such Warrant, on the following terms: for each
Warrant specified in the Warrant certificate one Ordinary Share at the
Subscription Price in respect of such Warrant payable in full on
subscription. The number and/or the nominal value of Ordinary Shares
to be subscribed and the subscription price are subject to adjustment
pursuant to paragraph 2 below. The subscription rights will not be
exercisable in respect of a fraction of an Ordinary Share. Failure to
exercise a Warrant prior to 5.00 p.m. on the relative Expiry Date will
mean that the Warrant shall become void and all rights attaching to
such Warrant shall cease.
(b) The number of Warrants to which each registered holder of Warrants
shall be entitled shall be evidenced by a Warrant certificate issued
by the Company. Warrant certificates shall be dated as at the date of
issue, whether on initial issue, transfer, exchange or in lieu of
mutilated, lost, stolen or destroyed Warrant certificates. Warrants
shall be deemed to have been exercised immediately prior to the close
of business on the date of the surrender for exercise of the Warrant
certificate.
(c) In order to exercise the subscription rights in respect of any
Warrants, the registered Warrant holder must, having completed the
notice of subscription on his Warrant certificate, lodge it at the
office of the Registrars of the Company accompanied by a remittance
for the total subscription price of the Ordinary Shares in respect of
which the subscription rights are being exercised. Once lodged, a
notice of subscription shall be irrevocable save with the consent of
the Directors.
(d) Ordinary Shares issued pursuant to the exercise of subscription rights
will be allotted not later than 14 days after, and with effect from,
the date on which the relative duly completed subscription notice
shall be lodged with the Registrars of the Company (the "subscription
date") and Ordinary Share certificates in respect of such Ordinary
Shares will be issued free of charge and despatched (at the risk of
the persons entitled thereto) not later than 14 days after the
relevant subscription date to the first named person in whose name the
Warrants are registered at the relevant subscription date or (subject
as provided by law) to such other persons as may be named in the form
of nomination upon the reverse of the Warrant certificate. In the
event that not all of the Warrants evidenced by a Warrant certificate
are exercised, the Company shall at the same time issue for no payment
a fresh Warrant certificate in the name of the Warrant holder for any
balance of the subscription rights remaining exercisable.
(e) Ordinary Shares allotted pursuant to the exercise of subscription
rights will not rank for any dividends or other distributions
declared, made or paid in respect of any financial year of the Company
prior to the financial year in which the relevant
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<PAGE>
subscription date falls, nor shall they rank for any dividends or
other distributions declared, made or paid on a date (or by reference
to a record date) prior to the relevant subscription date but, subject
thereto, will rank pari passu in all other respects with the Ordinary
Shares in issue at the relevant subscription date including ranking in
full for all dividends and other distributions in respect of the
financial year in which the relevant subscription date occurs provided
that on any allotment falling to be made pursuant to paragraph 3(c) or
3(d) below the Ordinary Shares so to be allotted shall not rank for
any dividends or other distributions declared, made or paid by
reference to a record date prior to the date of allotment.
(f) Application will be made to the London Stock Exchange for the Ordinary
Shares allotted pursuant to any exercise of subscription rights to be
admitted to the Official List and the Company will use all reasonable
endeavours to obtain the admission thereof not later than 28 days
after the relevant subscription date. To the extent not then exercised
all subscription rights in respect of any Series of Warrants shall
lapse at 5.00pm on the Expiry Date in respect of such Warrants.
(g) The Company shall be entitled to impose such conditions and
restrictions on transfer as it may from time to time determine are
reasonably necessary for the purpose of complying with relevant
securities laws of the United States.
2. ADJUSTMENT OF SUBSCRIPTION PRICE
(a) If, on a date (or by reference to a record date) on or before the
relative Expiry Date in respect of a Warrant, the Company shall allot
any Ordinary Shares fully paid by way of capitalisation of profits or
reserves to holders of Ordinary Shares on the register on a date (or
by reference to a record date) before the relative Expiry Date or upon
any consolidation or sub-division of the Ordinary Shares before such
Expiry Date, the number and/or nominal value of Ordinary Shares to be
subscribed on any subsequent exercise of the subscription rights in
respect of that Warrant will be increased or, as the case may be,
reduced in due proportion and the subscription price per Ordinary
Share will be adjusted accordingly. On any such capitalisation,
consolidation or sub-division the Company will procure that the
auditors for the time being of the Company will verify the correctness
of the appropriate adjustments and, within 28 days of such
adjustments, notice will be sent to each Warrant holder of the
adjusted number of Ordinary Shares to which the Warrant holder is
entitled to subscribe in consequence thereof, fractional entitlements
being ignored, such notice being accompanied by a new Warrant
certificate in respect of such adjusted number of Ordinary Shares.
(b) If, on a date (or by reference to a record date) on or before the
relative Expiry Date, the Company makes any offer or invitation
(whether by rights issue, rights offer or otherwise but not being an
offer to which paragraph 3(c) below applies or an offer of shares in
lieu of a cash dividend payment) to the holders of Ordinary Shares in
their capacity as such, or any offer or invitation (not being an offer
to which paragraph 3(d) below applies) is made to such holders
otherwise than by the Company, then the Company shall, as far as it is
able, procure that at the same time the same offer or invitation is
made to the then Warrant holders as if their
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<PAGE>
subscription rights had been exercisable and had been exercised on the
day immediately preceding the date (or record date) of such offer or
invitation on the terms (subject to any adjustment pursuant to
paragraph 2(a) above) on which the same could have been exercised on
the basis then applicable provided that, if the Directors shall so
resolve, in the case of any offer or invitation made by the Company,
the Company shall not be required to procure that the same offer or
invitation is made to the Warrant holders but the subscription price
and/or the number of Ordinary Shares to be subscribed on any
subsequent exercise of the subscription rights shall be adjusted
accordingly. The Company will procure that the auditors for the time
being of the Company will certify in writing the appropriateness of
the adjustments and, within 28 days, notice will be sent to each
Warrant holder together with a new Warrant certificate in respect of
the adjusted number of Ordinary Shares to which that Warrant holder is
entitled to subscribe in consequence thereof, fractional entitlements
being ignored.
(c) No adjustment shall be made to the subscription price of a Series of
Warrants pursuant to paragraph 2(a) or (b) if such adjustment would
(taken together with the amount of any adjustment carried forward
under the provisions of this paragraph 2(c)) be less than 1 per cent.
of the relative subscription price then in force and on any adjustment
the adjusted subscription price will be rounded down to the nearest
0.5p. Any adjustment not so made and any amount by which the
subscription price is rounded down will be carried forward and taken
into account in any subsequent adjustment.
3. OTHER PROVISIONS
So long as any subscription rights remain exercisable:
(a) the Company shall keep available for issue sufficient authorised but
unissued share capital to satisfy in full (without the need for the
passing of any resolution by shareholders) all subscription rights
remaining exercisable;
(b) the Company shall not (except with the sanction of an extraordinary
resolution of the Warrant holders of each Series) issue any Ordinary
Shares credited as fully paid by way of capitalisation of profits or
reserves nor make any such offer as is referred to in paragraph 2(b)
above if as a result the Company would on any subsequent exercise of
the subscription rights be obliged to issue Ordinary Shares at a
discount;
(c) if at any time an offer or invitation is made by the Company to the
holders of the Ordinary Shares for the purchase by the Company of any
of its Ordinary Shares, the Company shall simultaneously give notice
thereof to the Warrant holders and each such Warrant holder shall be
entitled at any time while such offer or invitation is open for
acceptance to exercise his subscription rights as if they were then
exercisable so as to take effect as if he had exercised his rights
immediately prior to the date (or record date) of such offer or
invitation;
(d) if at any time an offer is made to all holders of Ordinary Shares (or
all holders of Ordinary Shares other than the offeror and/or any
company controlled by the offeror
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<PAGE>
and/or persons acting in concert with the offeror) to acquire the
whole or any part of the issued share capital of the Company and the
Company becomes aware that as a result of such offer the right to cast
a majority of the votes which may ordinarily be cast on a poll at a
general meeting of the Company has or will become vested in the
offeror and/or such persons or companies as aforesaid, the Company
shall give notice to the Warrant holders of such vesting within 14
days of its becoming so aware, and each such Warrant holder shall be
entitled, at any time within the period of 60 days immediately
following the date of such notice, to exercise his subscription rights
as if they were exercisable on the last day of the said 60 day period
on the basis (subject to any adjustment pursuant to paragraph 2 above)
then applicable. Upon the expiry of such period, all Warrants shall
lapse. Publication of a scheme of arrangement under the Companies Act
1985 (as from time to time amended or re-enacted) providing for the
acquisition by any person of the whole or any part of the issued share
capital of the Company shall be deemed to be the making of an offer
for the purposes of this paragraph 3(d);
(e) if the Company commences liquidation, whether voluntary or compulsory
(except for the purpose of reconstruction, amalgamation or unitisation
on terms sanctioned by an extraordinary resolution of the holders of
the Warrants), it shall forthwith give notice thereof to all holders
of Warrants; thereupon each holder of a Warrant will (if in such
winding-up there shall be a surplus available for distribution amongst
the holders of the Ordinary Shares (including for this purpose the
Ordinary Shares which would arise on the exercise of all the
outstanding subscription rights) which, taking into account the
amounts payable on the exercise of the subscription rights, exceeds in
respect of each Ordinary Share a sum equal to the subscription price)
be treated as if immediately before the date of such order or
resolution his subscription rights had been exercisable and had been
exercised in full and shall accordingly be entitled to receive out of
the assets available on liquidation pari passu with the holders of the
Ordinary Shares such a sum as he would have received had he been the
holder of the Ordinary Shares to which he would have become entitled
by virtue of such subscription after deducting a sum per share equal
to the subscription price; subject to the foregoing, all subscription
rights shall lapse on liquidation of the Company; and
(f) the Company shall not (except with the sanction of an extraordinary
resolution of the Warrant holders of each series) make any allotment
of fully paid Ordinary Shares by way of capitalisation of profits or
reserves unless at the date of such allotment the Directors have
authority to grant the additional rights to subscribe to which the
Warrant holders will by virtue of paragraph 2(a) above be entitled in
consequence of such capitalisation.
4. MODIFICATION OF RIGHTS AND WARRANT INSTRUMENT
All or any of the rights for the time being attached to the Warrants may
from time to time (whether or not the Company is being wound up) be altered
or abrogated with the sanction of an extraordinary resolution of the
holders of the Warrants of each Series affected by such alteration or
abrogation. Such alteration or abrogation approved as aforesaid shall be
effected by deed poll executed by the Company and expressed to be
supplemental to this
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<PAGE>
Warrant Instrument. Modifications to this Warrant Instrument which are of a
formal, minor or technical nature, or made to correct a manifest error, or
any modifications which the Directors consider appropriate may be effected
by deed poll executed by the Company and expressed to be supplemental to
this Warrant Instrument and notice of such alteration or abrogation or
modification shall be given by the Company to the Warrant holders.
5. PURCHASE BY THE COMPANY
The Company shall be entitled at any time to purchase Warrants on the open
market or otherwise. Any Warrants so purchased shall be cancelled
immediately and shall not be available for re-issue.
6. TRANSFER
6.1 The Warrants will be registered and transferable in whole or in part by
instrument of transfer in any usual or common form or in any other form
which may be approved by the Directors except that no transfer of a right
to subscribe for a fraction of an Ordinary Share shall be effected. Save
insofar as the same would be inconsistent with this Warrant Instrument, the
provisions of the Articles of Association of the Company relating to the
registration, transfer and transmission of shares shall apply mutatis
mutandis to the Warrants.
6.2 Notwithstanding any other provision contained herein, for so long as any
Regulated Entity, holds any Series "G" Warrants which, upon exercise, would
result in such Regulated Entity holding more than 5% of the outstanding
Ordinary Shares, such Regulated Entity may only transfer the Series "G"
Warrants under the following circumstances; (i) in a widely distributed
public offering; (ii) in a transfer pursuant to Rule 144 under the United
States of America ("U.S.") Securities Act of 1933, as amended, or any
similar rule then in force; (iii) in a transfer where the Ordinary Shares
underlying the Warrants being transferred represent two per cent or less of
the outstanding Ordinary Shares (not including the transfer from the
Regulated Entity); (v) in a transfer to the Company; (vi) in a transfer to
an affiliate or such holder or any other Regulated Entity; or (vii) in any
method of transfer permitted by the Board of Governors of the Federal
Reserve System of the U.S.
Once such Regulated Entity holds Warrants and Ordinary Shares which, after
exercise of the Warrants, would constitute 5.0% or less of the outstanding
Ordinary Shares, the foregoing restrictions on transfer shall cease to
apply.
"Regulated Entity" means (i) any entity that is a "bank holding company"
(as defined in Section 2(a) of the U.S. Bank Holding Company Act of 1956,
as amended, (the "BHC Act")) or any non-bank subsidiary of such an entity
or (ii) any entity that, pursuant to Section 8(a) of the U.S. International
Banking Act of 1978, as amended, is subject to the provisions of the BHC
Act or any non-bnak subsidiary of such an entity.
7. INDEMNIFICATION OF WARRANT AGENT
(a) The Warrant Agent shall act as agent of the Company. The Warrant Agent
shall not, by issuing and delivering Warrant Certificates or by any
other act be deemed to make any representations as to the validity or
value of the Warrant Certificates or
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<PAGE>
the Warrants represented thereby or of the Ordinary Shares or other
property delivered on exercise of any Warrant. The Warrant Agent shall
not be under any duty or responsibility to any holder of the Warrant
Certificates to make or cause to be made any adjustment of the
Subscription Price or to determine whether any fact exists which may
require any such adjustments.
(b) The Warrant Agent shall not (i) be liable for any statement or fact
contained in this instrument or for any action taken or omitted by it
in reliance on any Warrant Certificate or other document or instrument
believed by it in good faith to be valid and to have been signed or
presented by the proper party or parties, (ii) be responsible for any
failure on the part of the Company to comply with any of its covenants
and obligations contained in this instrument or in the Warrant
Certificates, or (iii) be liable for any act or omission in connection
with this Agreement except for its own negligence or wilful
misconduct.
(c) The Warrant Agent may at any time seek legal advice of any solicitors
(who may be solicitors to the Company) and shall incur no liability or
responsibility for any action taken or omitted by it in good faith in
accordance with such notice, statement, instrument, request,
direction, order or demand.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument
signed by any Director or its Secretary. The Warrant Agent shall not
be liable for any action taken or omitted by it in accordance with
such notice, statement, instruction, request, direction, order or
demand.
(e) The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse the Warrant Agent for its
reasonable expenses. The Company further agrees to indemnify the
Warrant Agent against any and all losses, expenses and liabilities,
including judgments, costs and fees, for any action taken or omitted
by the Warrant Agent in the execution of its duties and powers,
excepting losses, expenses and liabilities arising as a result of the
Warrant Agent's negligence or wilful misconduct.
8 GENERAL
(a) The Company will concurrently with the issue of the same to holders of
Ordinary Shares send to each holder of a Warrant (or, in the case of
joint holders, to the first named) a copy of each published annual
report and accounts of the Company and unaudited interim report of the
Company together with all documents required by law to be annexed
thereto, and copies of every statement, notice or circular issued to
holders of Ordinary Shares.
(b) For the purposes of this Warrant Instrument, "business day" means a
day (excluding Saturdays and public holidays) on which banks in
England are open for business and an "extraordinary resolution" of a
series of warrantholders means a resolution proposed at a meeting of
the Warrant holders in question duly convened and held and passed by a
majority consisting of not less than three-fourths of the votes cast,
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<PAGE>
whether on a show of hands or on a poll. All the provisions of the
Articles of Association for the time being of the Company as to
General Meetings shall apply mutatis mutandis as though each series of
the Warrants formed a separate class of Ordinary Shares forming part
of the capital of the Company but so that (i) the period of notice
shall be 21 days at least, (ii) the necessary quorum shall be Warrant
holders of the relevant series (present in person or by proxy)
entitled to subscribe for one-third in nominal amount of the Ordinary
Shares attributable to the then outstanding Warrants of that series,
(iii) every Warrant holder present in person at any such meeting shall
be entitled on a show of hands to one vote and every Warrant holder
present in person or by proxy shall be entitled on a poll to one vote
for every such Ordinary Share for which he is entitled to subscribe,
(iv) any Warrant holder present in person or by proxy may demand or
join in demanding a poll, and (v) if at any adjourned meeting a quorum
as defined above is not present, a Warrant holder who is then present
in person or by proxy shall be a quorum.
(c) The invalidity of any undertaking, or any part of any undertaking, in
paragraph 3 shall not affect the validity of any other part of that
paragraph. If any event occurs which, but for any rule of law, would
be a breach of paragraph 3, the Company shall pay to the Warrant
holders such sum as the auditors of the Company shall determine to be
equal to the loss in value of the Warrants resulting from such event.
(d) Any determination or adjustment made pursuant to these terms and
conditions by the auditors of the Company shall be made by them as
experts and not arbitrators and shall be final and binding on the
Company and all Warrant holders.
9. GOVERNING LAW
The above terms and conditions shall be construed in accordance with and be
governed by the laws of England.
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<PAGE>
Exhibit 3.5
DATED 1997
----------------------------------------
ALLIANCE RESOURCES PLC
________________________________________
LOAN NOTE INSTRUMENT
constituting convertible non-interest bearing
subordinated unsecured loan notes 1997/2007
of Alliance Resources PLC
________________________________________
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
<PAGE>
Tel: 0171-638-1111
Fax: 0171-972-7990
ASC/PDG/A90200030
<PAGE>
THIS LOAN NOTE INSTRUMENT is entered into by way of deed poll this . day of .
1997 by Alliance Resources PLC, a company registered in England and Wales with
registered number 2532955 whose registered office is at Kingsbury House, 15-17
King Street, London, SW1Y 6QU (the "Company").
WHEREAS
(A) The Company has, by resolution of a duly authorised committee of its Board
of Directors, passed on . 1997, created (Pounds)873,281.25 nominal amount
of convertible, non-interest bearing, subordinated, unsecured loan notes
1997/2007, constituted as to 1,078,125 notes of 81p each, as unsecured,
non-interest bearing, subordinated obligations of the Company, constituted
as provided in this Loan Note Instrument.
(B) The Notes have been created in connection with, and will be issued in part
consideration for, the ORRI Acquisition (as defined in the listing
particulars relating to the Company dated . 1997).
NOW THIS LOAN NOTE INSTRUMENT WITNESSETH AND THE COMPANY HEREBY AGREES AND
DECLARES AS FOLLOWS:-
1. INTERPRETATION
--------------
1.1 In this Loan Note Instrument and the schedules hereto, unless the context
otherwise requires, the following expressions shall have the following
meanings:-
"business day" means a day (other than a Saturday) on which banks are
open for the transaction of normal banking business in
London;
"Company Conversion means the period commencing on the day
Period" falling ten years from the date of this Loan
Note Instrument and expiring on the day prior
to the day falling ten years and six months
from the date of this Loan Note Instrument;
"Conditions" means the conditions set out in schedule 2,
as they may from time to time be modified in
accordance with the provisions of this
Instrument;
"Conversion Date" shall have the meaning given in Condition
7.1;
"Conversion Rate" means a rate of one Ordinary Share for one
fully paid Note, as adjusted from time to
time in the circumstances referred to and in
the manner provided in the Conditions;
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<PAGE>
"Directors" means the Board of Directors for the time
being of the Company or a committee of the
Board of Directors of the Company duly
authorised to issue and call for payment
under, and/or deal with all or certain
matters relating to, the Notes;
"Extraordinary Resolution" means an extraordinary resolution of the
Noteholders, as defined in paragraph 18 of
schedule 4;
"First Instalment" means the first instalment of 80p credited as
paid up on issue in respect of each Note;
"Instrument" means this Instrument and the schedules
hereto, as from time to time modified in
accordance with the provisions of the
Instrument;
"Notes" means the (Pounds)873,281.25 nominal amount
of convertible, non- interest bearing,
subordinated, unsecured loan notes 1997/2007
of the Company, constituted as to 1,078,125
notes of 81p each, hereby constituted or (as
the case may be) the amount thereof for the
time being outstanding or (as the context may
require) the principal monies represented by
the same or a specific portion thereof;
"Noteholders" means the several persons for the time being
entered in the Register as the holders of the
Notes;
"Noteholder Conversion means the period commencing on the date of
Period" this Loan Note Instrument and expiring on the
day prior to the commencement of the Company
Conversion Period;
"Ordinary Shares" means issued and fully paid ordinary shares
of 40p each in the capital of the Company or
any other ordinary shares of the Company into
which such shares may be converted,
consolidated or sub-divided;
"Register" means the register of holders of Notes kept
by or on behalf of the Company; and
"Second Instalment" means the second instalment of 1p payable,
subject to the Conditions, in respect of each
Note.
1.2 Words importing the singular include the plural and vice versa, words
importing a gender include every gender and references to persons include
references to corporations, partnerships and other unincorporated
associations or bodies of persons.
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<PAGE>
1.3 References to a Clause or Schedule are references to a clause of, or a
schedule to, this Instrument.
1.4 References to statutory provisions shall be construed as references to
those provisions as respectively replaced, amended or re-enacted (whether
before or after the date hereof) from time to time and shall include any
provisions of which they are re-enactments (whether with or without
modification) and any subordinate legislation made under such provisions.
1.5 Words and expressions not otherwise defined in this Instrument and which
are defined in the Companies Act 1985 (as amended) bear the meanings
ascribed to them respectively in that Act.
1.6 The contents table and the descriptive headings to Clauses and schedules
are inserted for convenience only, have no legal effect and shall be
ignored in the interpretation of this Instrument.
1.7 The provisions contained in the schedules shall have effect as if they had
been set out and incorporated in this Instrument.
2. COVENANT TO COMPLY WITH THE TERMS OF THE NOTES
----------------------------------------------
2.1 The Company HEREBY COVENANTS with the Noteholders and each of them to
comply with the terms of the Notes and to observe and perform the
conditions, which conditions shall be deemed to be incorporated in this
instrument and shall be binding on the Company and the Noteholders and all
persons claiming through or under them respectively.
2.2 By subscribing or purchasing or being a transferee of, or by applying or
causing application to be made for registration as the holder of, any Note,
a Noteholder agrees to be bound by the terms of this Instrument.
3. AMOUNT OF THE NOTES
-------------------
3.1 The total nominal amount of the Notes constituted by this Instrument is
limited to (Pounds)873,281.25.
3.2 The Notes will be issued in registered form in denominations of 81p in
nominal amount or integral multiples thereof.
4. ALLOTMENT AND PAYMENT UP OF THE NOTES
-------------------------------------
The Notes shall be allotted credited as partly paid up as to the First
Instalment paid on each Note. The Second Instalment shall be payable in
accordance with Condition 2. On payment of the Second Instalment in respect
of a Note, that Note shall become fully paid.
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<PAGE>
5. INTEREST
--------
The Notes shall not bear interest.
6. REPAYMENT
---------
The Notes shall be repaid in accordance with Condition 5.
7. STATUS OF THE NOTES AND SUBORDINATION
-------------------------------------
7.1 The Notes represent a direct and unsecured obligation of the Company for
the due and punctual payment of the principal in respect of them and for
the performance of all the obligations of the Company with respect to them.
7.2 If whilst any Notes remain capable of being converted, the Company
commences liquidation, whether voluntary or compulsory, the provisions of
Condition 10 shall apply.
8. CONVERSION
----------
The Notes shall be convertible in accordance with Conditions 7 and 11.
9. REGISTER
--------
9.1 The Company shall cause a register to be maintained in respect of the Notes
in accordance with the provisions of schedule 3.
9.2 The provisions relating to the Register set out in schedule 3 shall be
deemed to be incorporated in this Instrument and shall be binding on the
Company and the Noteholders and on all persons claiming through or under
them respectively.
10. TRANSFER
--------
The Notes will be transferable in accordance with schedule 3.
11. NOTE CERTIFICATES
-----------------
11.1 Every Noteholder will, subject to Clause 11.3, be entitled without charge
to one partly paid Note certificate for the aggregate number of partly paid
Notes held by him.
11.2 The Directors shall issue a fully paid Note certificate to any Noteholder
who has made valid payment of the Second Instalment and delivered up his
partly paid certificate.
11.3 Joint holders of Notes shall be entitled to one certificate only in respect
of the Notes held by them jointly and such certificate shall be delivered
to that one of the joint holders who is first named on the Register in
respect of the joint holding or to such other person as the joint holders
may in writing direct.
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<PAGE>
11.4 Certificates shall be sealed by the Company under its common seal or under
its official seal kept by the Company pursuant to Section 40 of the
Companies Act 1985 and will state the number of Notes held by the
Noteholder. Partly paid and fully paid certificates shall be in or
substantially in the form or to the effect set out in schedule 1, shall be
certificated as being partly paid or fully paid as the case may be and
shall be issued in respect of whole Notes only.
12. NOTICES
-------
12.1 Any notice or other document may be served on or delivered to any
Noteholders by the Company or by the Directors, either personally or by
sending it through the post in a prepaid cover addressed to such Noteholder
at his registered address or at such other address as such Noteholder may
have specified in writing to the Company or the Company's agent for the
delivery of Certificates and/or other documentation relating to the Notes.
Any notice or document served or delivered to the joint holder of any Notes
whose name stands first in the Register in respect of such Notes shall be
sufficient notice to or service on all the joint holders.
12.2 Notice may be given to the person(s) entitled to any Notes in consequence
of the death or bankruptcy of any Noteholder by sending the same by post in
a prepaid cover addressed to such person(s) by name or by the title of the
representatives or trustees of such Noteholder at the address (if any)
supplied for the purpose by or on behalf of such person(s) or (until such
name and address are supplied) by giving notice in the manner in which it
would have been given if the death or bankruptcy had not occurred.
12.3 Where a notice or other document is served or sent by first class post,
service or delivery shall be deemed to be effected 24 hours after the time
when the cover containing the same is posted in the case of service by
first class post, or 48 hours after the time of posting in the case of
service by second class post. In proving such service or delivery, it shall
be sufficient to prove that such cover was properly addressed, stamped and
posted.
13. MODIFICATION OF RIGHTS
----------------------
All or any of the rights for the time being attached to the Notes may from
time to time (whether or not the Company is being wound up) be altered or
abrogated with the sanction of an Extraordinary Resolution. Such alteration
or abrogation approved as aforesaid shall be effected by deed poll executed
by the Company and expressed to be supplemental to this Loan Note
Instrument. Modifications to this Loan Note Instrument which are of a
formal, minor or technical nature, or made to correct a manifest error, or
any modifications which the Directors consider appropriate may be effected
by deed poll executed by the Company and expressed to be supplemental to
this Loan Note Instrument and notice of such alteration or abrogation or
modification shall be given by the Company to the Noteholders.
14. GOVERNING LAW
-------------
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<PAGE>
This Instrument and the Notes shall be governed by and construed in
accordance with English law and any disputes arising in respect thereof
shall be subject to the jurisdiction of the English courts.
IN WITNESS whereof this Instrument has been executed as a deed the day and year
first above written
Executed as a deed by )
Alliance Resources PLC )
acting by two of its )
directors/one of its )
directors and its secretary )
Director
Director/Secretary
- 6 -
<PAGE>
SCHEDULE 1
FORM OF NOTE
Certificate No. Transfer No. Date Nominal Amount
(Pounds) ............
ALLIANCE RESOURCES PLC
______________________
(Registered in England No. 2532955)
CONVERTIBLE NON-INTEREST BEARING SUBORDINATED UNSECURED
LOAN NOTES 1997/2007
Issue of (Pounds)873,281.25 Unsecured Loan Notes 1997/2007 (the "NOTES"),
created and issued by ALLIANCE RESOURCES PLC (the "COMPANY") pursuant to the
Memorandum and Articles of Association of the Company and a resolution of the
board of directors passed on . 1997.
THIS IS TO CERTIFY that of
is/are the registered holder(s) of (Pounds). in nominal amount of the above
mentioned Notes which are constituted by an instrument made by the Company on .
1997 (the "INSTRUMENT") and are issued with the benefit of and subject to the
provisions contained in the instrument and the conditions endorsed hereon.
Given under the Common Seal of the Company
Dated . 1997
Notes: (i) Where the context so admits, words and expressions defined in the
instrument shall bear the same respective meanings in the
conditions endorsed hereon.
(ii) The Notes are transferable in amounts or multiples of 81p. No
transfer, whether of the whole or any part of the Notes comprised
in this certificate, will be accepted for registration unless
accompanied by this certificate and lodged at the registered
office of the company.
(iii) The Notes are repayable and convertible in accordance with the
conditions endorsed hereon.
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<PAGE>
(iv) The Notes represented by this certificate are [fully paid]
[partly paid up as to 80p per Note].
- 8 -
<PAGE>
NOTICE OF CONVERSION
To: ALLIANCE RESOURCES PLC (the "COMPANY")
1. I/We, being the registered holder(s) of the Notes represented by this
certificate, hereby give notice of my/our desire to convert into fully paid
Ordinary Shares the whole (pounds). only/1/ of such Notes in accordance
with the conditions applicable thereto.
2. I/We agree to accept all of the fully paid Ordinary Shares of the Company
to be issued to me/us pursuant hereto subject to the Memorandum and
Articles of Association of the Company. I/We desire all such Ordinary
Shares to be registered in my/our name(s) and hereby authorise the entry of
my/our name(s) in the Register of Members in respect thereof and the
despatch of a certificate therefor by post at my/our risk to the person
whose name and address is set out below or, if none is set out, to the
registered address of the sole or first named holder.
3. I/We hereby authorise the despatch of a certificate for the balance (if
any) of the Notes represented by this certificate which are not converted
by post at my/our risk to the person whose name and address is set out
below or, if none is set out, to the sole or first named holders at his/her
registered address.
Dated . .
Signature(s) of Noteholder(s)/2/:
_____________________________________________
_____________________________________________
Name/3/: _____________________________________________
Address: _____________________________________________
___________________________
/1/ Delete or complete as appropriate. Conversion of part only is permitted in
accordance with condition 7 and must be 81p or a multiple thereof. Only
fully paid Notes may be converted. If no amount is inserted, all of such
Notes will be converted.
/2/ In the case of joint holders ALL should sign. A body corporate should
execute under its common seal or under the hand of some officer or attorney
duly authorised in that behalf in which event the Note must be accompanied
by the authority under which this notice is completed.
/3/ Please insert in BLOCK CAPITALS the name and/or the address of the person
to whom you wish the Ordinary Share certificate and any balance certificate
for Notes to be sent if it is different from that of the sole or first
named Noteholder.
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<PAGE>
SCHEDULE 2
THE CONDITIONS
1. DEFINITIONS
-----------
Words and expressions defined in Clause 1 of the Instrument bear the same
meanings when used in these Conditions.
2. PAYMENT OF THE SECOND INSTALMENT
--------------------------------
2.1 The Second Instalment on a Note may be paid at any time at the option of
the relative Noteholder. Payment of the Second Instalment shall be a
condition precedent to the right of a Noteholder to convert Notes into
Ordinary Shares.
2.2 Payment of the Second Instalment must be made (without prejudice to the
Company's right to accept late payment) on such date falling during the
Company Conversion Period as the Company may notify to Noteholders by
giving notice falling not less than 14 nor more than 28 days after the date
of such notice. No interest will be payable on any amounts paid before
their due date and such amounts will only be applied in payment of the
Second Instalment on that date.
2.3 The Second Instalment is to be paid by lodging the partly paid Note
certificate, together with a remittance for the full amount of the Second
Instalment in pounds sterling made payable to the Company, at the
registered office of the Company.
2.4 Until such time as the Second Instalment in respect of any Note is duly
paid, the person(s) who is/are for the time being registered as the
holder(s) of such Note shall be liable to the Company to pay the amount of
the Second Instalment in respect of that Note.
3. CONSOLIDATION
-------------
If the Second Instalment is not paid in accordance with paragraph 2.2 above
following service of notice by the Company pursuant to such condition all
partly paid Notes registered in the name of a Noteholder at such time will
then be consolidated and sub- divided into the relevant number of fully
paid Notes of 81p nominal whereupon such Noteholder's obligation to pay the
Second Instalment shall cease.
4. STATUS
------
The Notes will constitute an unsecured, non-interest bearing, subordinated
obligation of the Company in accordance with the provisions of the
Instrument.
5. REPAYMENT
---------
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<PAGE>
Any Note which has not been converted prior to ., . 2007 [10 years and 6
months from issue] will be repaid on that date at an amount equal to twice
its nominal amount if fully paid up and otherwise at an amount equal to
twice the nominal amount paid up thereon.
6. REPLACEMENT OF NOTE CERTIFICATES
--------------------------------
If any certificate be worn out, lost, stolen, mutilated or destroyed then a
new certificate in lieu thereof may be issued to the person entitled to the
Notes represented thereby without charge (other than exceptional out-of-
pocket expenses) and on such terms as to evidence and indemnity as the
Company may require. An entry as to the issue of a new certificate and as
to the provision of an indemnity (if any) shall be made in the Register.
Mutilated certificates must be surrendered before replacements will be
issued.
7. PROCEDURE ON CONVERSION AT THE OPTION OF THE NOTEHOLDERS
--------------------------------------------------------
7.1 Each holder of fully paid Notes shall be entitled to require the Company to
allot fully paid Ordinary Shares in accordance with paragraph 7.3 of this
condition on any date (each, a "CONVERSION DATE") during the Noteholder
Conversion Period in exchange for and in satisfaction of such nominal
amount of fully paid Notes held by him as he may specify in the Conversion
Notice (as defined below) (being an integral multiple of 81p nominal of
Notes) at the rate (subject to adjustment in accordance with condition 8)
of 40p nominal of ordinary share capital of the Company for every 81p
nominal of fully paid Notes converted (such rate as so adjusted from time
to time being hereinafter called the "CONVERSION RATE") provided that no
Noteholder shall be entitled to allotment of a fraction of an Ordinary
Share. The rights of conversion conferred by these conditions are
hereinafter referred to as the "CONVERSION RIGHTS".
7.2 Such right shall be exercisable by the Noteholder concerned completing and
signing the Conversion Notice printed on the Notes (the "CONVERSION
NOTICE") in respect of which it is desired to exercise the Conversion
Rights (or by completing such other form as the Directors may approve) and
delivering the same together with such certificate, and such other evidence
(if any) as the Company may reasonably require to prove the title of the
person exercising the Conversion Rights, to the registered office of the
Company so as to arrive at any time during the Noteholder Conversion
Period. A Conversion Notice shall not be withdrawn without the consent in
writing of the Company.
7.3 The Company will, not later than 14 days after such delivery, allot and
issue to the Noteholder or his nominee(s) the nominal amount of Ordinary
Shares credited as fully paid to which he or such nominee(s) shall be
entitled by virtue of the exercise of his Conversion Rights and such
allotment and issue shall be in full satisfaction and discharge of the
principal amount of the Notes so converted.
7.4 The Company shall, not later than the expiry of 14 days next following a
Conversion Date, send (or procure to be sent) free of charge to each
Noteholder who has exercised his Conversion Rights or as otherwise directed
a certificate for the Ordinary Shares arising on conversion together (if
appropriate) with a certificate in respect of any balance of such
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<PAGE>
Noteholder's holding of Notes in respect of which the Conversion Rights
have not been exercised as aforesaid.
7.5 Ordinary Shares allotted on conversion will not rank for any dividends or
other distributions declared, made or paid in respect of any financial year
of the Company prior to the financial year in which the relevant Conversion
Date falls, nor shall they rank for any dividends or other distributions
declared, made or paid on a date (or by reference to a record date) prior
to the relevant Conversion Date but, subject thereto, will rank pari passu
in all other respects with the Ordinary Shares in issue at the relevant
Conversion Date including ranking in full for all dividends and other
distributions in respect of the financial year in which the relevant
Conversion Date occurs provided that on any allotment falling to be made
pursuant to paragraph 9.1 below the Ordinary Shares so to be allotted shall
not rank for any dividends or other distributions declared, made or paid by
reference to a record date prior to the date of allotment.
7.6 Application will be made to the London Stock Exchange for the Ordinary
Shares allotted pursuant to any exercise of conversion rights to be
admitted to the Official List and the Company will use all reasonable
endeavours to obtain the admission thereof not later than 28 days after the
relevant Conversion Date.
8. CAPITALISATION ISSUES
---------------------
Upon any allotment of fully paid Ordinary Shares pursuant to a
capitalisation of profits or reserves to any holders of Ordinary Shares on
the register on a record date being a date on which any Notes remain
capable of being converted, or upon any consolidation or sub- division of
the Ordinary Shares whilst any Notes remain capable of being converted, the
nominal amount of ordinary share capital of the Company to be issued in
respect of each 81p nominal of Notes converted on any Conversion Date
following such record date shall be increased or, as the case may be,
decreased in due proportion (as certified by the auditors of the Company
acting as experts and not as arbitrators and whose certificate shall, save
for any manifest error, be conclusive and binding on all concerned). No
adjustment shall be made in the Conversion Rate by reason only of the issue
by the Company to a holder of Ordinary Shares in lieu, in whole or in part,
of any cash dividend of fully paid Ordinary Shares by way of capitalisation
of an amount standing to the credit of the profit and loss account or other
reserves.
9. OFFERS AND INVITATIONS
----------------------
9.1 If, whilst any Notes remain capable of being converted, the Company makes
any offer or invitation (whether by rights issue, rights offer or otherwise
but not being an offer of shares in lieu of a cash dividend payment) to the
holders of Ordinary Shares in their capacity as such, or any offer or
invitation is made to such holders otherwise than by the Company, then the
Company shall, as far as it is able, procure that at the same time the same
offer or invitation is made to the then Noteholders as if their conversion
rights had been exercisable and had been exercised on the day immediately
preceding the date (or record date) of such offer or invitation on the
terms (subject to any adjustment pursuant
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<PAGE>
to paragraph 8 above) on which the same could have been exercised on the
basis then applicable provided that, if the Directors shall so resolve, in
the case of any offer or invitation made by the Company, the Company shall
not be required to procure that the same offer or invitation is made to the
Noteholders but the Conversion Rate shall be adjusted accordingly. The
Company will procure that the auditors for the time being of the Company
will certify in writing the appropriateness of the adjustments.
9.2 If, whilst any of the Notes remain capable of being converted, any offer is
made to all (or, as nearly as practicable, all) the holders of the ordinary
share capital of the Company (or to all, or as nearly as practicable all,
such holders other than the offeror and/or any company controlled by the
offeror and/or persons associated or acting in concert with the offeror) to
acquire the whole or any part of the ordinary share capital of the Company
and the Company becomes aware that the right to cast more than 50 per cent.
of the votes which may ordinarily be cast on a poll at a general meeting of
the Company has or will become vested in the offeror and/or any company
controlled by the offeror and/or persons associated or acting in concert
with the offeror the Company shall give notice of that fact in writing to
all Noteholders within 14 days of its becoming aware of the same. Upon the
expiry of 60 days immediately following the date of such notice all
outstanding Notes in respect of which a Conversion Notice has not been
served shall, if not fully paid, be consolidated in accordance with
paragraph 3 and shall be treated as if a Conversion Notice in respect of
all such Notes had been duly served 14 days prior to the expiry of such
period.
10. LIQUIDATION
If, whilst any Notes remain capable of being converted, the Company
commences liquidation, whether voluntary or compulsory, the Company shall
forthwith give (or procure to be given) notice in writing to Noteholders of
such liquidation and, in reasonable detail, of the rights of Noteholders
hereunder as a result thereof. Thereupon, each Noteholder shall be deemed
in respect of the whole of his Notes to have given notice to the Company to
be treated as if a Conversion Date had occurred on the day immediately
preceding the date of such commencement and his Conversion Rights had been
exercisable and exercised as at that date at the Conversion Rate then
applicable. Thereupon, the Noteholder so electing shall be entitled, in
lieu of the payments which would otherwise be due in respect of his Notes,
to participate in the assets available in the liquidation, if any, pari
passu with the holders of Ordinary Shares as if he were the holder of the
Ordinary Shares (including any fractional entitlement) to which he would
have become entitled by virtue of such conversion.
11. CONVERSION AT THE OPTION OF THE COMPANY
At any time during the Company Conversion Period, the Company shall be
entitled by not less than 14 days' notice in writing to Noteholders (a
"COMPULSORY CONVERSION NOTICE") to convert, on the expiry date of such
Compulsory Conversion Notice, the whole (but not part only) of the Notes
into Ordinary Shares at the Conversion Rate applicable on such expiry date
and in the event of such notice being given as aforesaid the holding
- 13 -
<PAGE>
of such Notes of each Noteholder shall be automatically converted at such
rate on such expiry date. For the purposes of this condition 11 such expiry
date shall be deemed to be a Conversion Date and the provisions of these
conditions shall apply to any conversion hereunder accordingly.
12. NO CONVERSION OF PARTLY PAID NOTES
No Notes other than fully paid Notes shall be capable of conversion.
Provided however that a holder of partly paid Notes may convert such Notes,
if they are then convertible, in accordance with paragraph 7 above by
tendering payment in full of the Second Instalment with the Conversion
Notice. This paragraph shall be without prejudice to the rights of the
Company under paragraph 3 above.
13. RESTRICTIONS
So long as any Notes remain capable of being converted then, except with
such sanction or consent as is required under these conditions for any
modification, abrogation or compromise of the rights of Noteholders, the
Company undertakes (so far as it is lawfully able) to each of the
Noteholders that:-
(a) the Company shall keep available for issue sufficient authorised but
unissued share capital to satisfy in full (without the need for the
passing of any resolution by shareholders) all conversion rights
remaining exercisable;
(b) the Company shall not issue any Ordinary Shares credited as fully paid
by way of capitalisation of profits or reserves nor make any such
offer as is referred to in paragraph 9.1 above if as a result the
Company would on any subsequent exercise of the conversion rights be
obliged to issue Ordinary Shares at a discount.
14. GENERAL
14.1 The Company will concurrently with the issue of the same to holders of
Ordinary Shares send to each Noteholder (or, in the case of joint holders,
to the first named) a copy of each published annual report and accounts of
the Company and unaudited interim report of the Company together with all
documents required by law to be annexed thereto, and copies of every
statement, notice or circular issued to holders of Ordinary Shares.
14.2 Any determination or adjustment made pursuant to these terms and conditions
by the auditors of the Company shall be made by them as experts and not
arbitrators and shall be final and binding on the Company and all
Noteholders.
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<PAGE>
SCHEDULE 3
PROVISIONS AS TO THE REGISTER
1. REGISTER OF NOTES
1.1 The Company shall cause a register to be maintained at the registered
office of the Company showing the amount of the Notes for the time being
issued, the date of issue and the amount of Notes for the time being
outstanding, the names and addresses of the Noteholders, the nominal
amounts of the Notes held by them respectively and all transfers or changes
of ownership of the Notes.
1.2 Any change of name or address on the part of any holder of Notes shall
forthwith be notified by the holder to the Company and the Company shall
alter the Register accordingly.
2. RECOGNITION OF NOTEHOLDER AS ABSOLUTE OWNER
2.1 Except as required by law, the Company will recognise the registered holder
of any Notes as the absolute owner thereof and shall not (except as ordered
by a court of competent jurisdiction) be bound to take notice or see to the
execution of any trust, whether express, implied or constructive, to which
any Notes may be subject and the Company may accept the receipt of the
registered holder for the time being of any Notes, or in the case of joint
registered holders the receipt of any of them, for the principal moneys
payable in respect thereof or for the interest from time to time accruing
due in respect thereof or for any other moneys payable in respect thereof
as a good discharge to the Company notwithstanding any notice it may have
whether express or otherwise of the right, title, interest or claim of any
other person to or in such Notes, interest or moneys.
2.2 If a warrant in payment of any amounts due to the registered holders of any
Notes, made payable and despatched in accordance with the conditions, is
encashed such encashment shall be deemed to be a good discharge to the
Company notwithstanding any notice it may have whether express or otherwise
of the right, title, interest or claim of any other person to or in such
moneys.
2.3 No notice of any trust, express, implied or constructive, shall (except as
by statute provided or as required by order of a court of competent
jurisdiction) be entered in the Register in respect of any Notes.
3. EXCLUSION OF EQUITIES
The Company will recognise every holder of Notes as entitled to his Notes
free from any equity, set-off or cross-claim on the part of the Company
against the original or any intermediate holder of the Notes.
4. TRANSFERABILITY OF NOTES
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<PAGE>
4.1 Every holder of Notes will be entitled (subject as hereinafter provided) to
transfer the same or any part (being an amount or integral multiple of 81p)
by an instrument in writing in the usual or common form or such other form
as the Company may accept. There shall not be included in any instrument of
transfer any notes other than the Notes constituted by the Instrument.
4.2 Every instrument of transfer must be signed by the transferor or where the
transferor is a corporation given under its common seal or signed on its
behalf by a duly authorised officer or agent and the transferor shall
remain the owner of the Notes to be transferred until the name of the
transferee is entered in the Register in respect thereof.
4.3 Every instrument of transfer must be lodged for registration at the place
where the Register shall for the time being be kept accompanied by the
certificate for the Notes all or part of the nominal amount of which is to
be transferred and such other evidence as the Directors or other officers
of the Company authorised to deal with transfers may require to prove the
title of the transferor or his right to transfer the Notes and, if the
instrument of transfer is executed by some other person on his behalf, the
authority of the person signing the same.
4.4 No transfer shall be registered of Notes in respect of which a notice
requiring repayment has been given.
4.5 All instruments of transfer which shall be registered may be retained by
the Company.
4.6 Notwithstanding any other provision contained herein, for so long as any
Regulated Entity holds any Notes which, upon conversion to Ordinary Shares,
would result in such Regulated Entity holding more than 5% of the
outstanding Ordinary Shares, such Regulated Entity may only transfer such
Notes under the following circumstances: (i) in a widely distributed public
offering; (ii) in a transfer pursuant to Rule 144 under the United States
of America ("U.S.") Securities Act of 1933, as amended, or any similar rule
then in force; (iii) in a transfer where the Ordinary Shares underlying the
Notes being transferred represent two percent or less of the outstanding
Ordinary Shares; (iv) in a transfer to a person if such person already owns
or has negotiated to purchase at least a majority of the Ordinary Shares
(not including the transfer from the Regulated Entity); (v) in a transfer
to the Company; (vi) in a transfer to an affiliate of such holder or any
other Regulated Entity (as defined below); or (vii) in any other transfer
permitted by the Board of Governors of the Federal Reserve System of the
U.S.
Once such Regulated Entity holds Notes and Ordinary Shares which, after
conversion of such Notes, would constitute 5.0% or less of the outstanding
Ordinary Shares, the foregoing restrictions on transfer shall cease to
apply.
"Regulated Entity" means (i) any entity that is a "bank holding company"
(as defined in Section 2(a) of the U.S. Bank Holding Company Act 1956, as
amended, (the "BHC Act")) or any non-bank subsidiary of such an entity or
(ii) any entity that, pursuant to
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<PAGE>
Section 8(a) of the U.S. International Banking Act of 1978, as amended, is
subject to the provisions of the BHC Act or any non-bank subsidiary of such
an entity.
4.7 The Company shall be entitled to impose such conditions and restrictions on
transfer as it may from time to time determine are reasonably necessary for
the purpose of complying with relevant securities laws of the United
States.
5. NO FEE FOR REGISTRATION OF TRANSFERS
No fee shall be charged for the registration of any transfer or for the
registration of any probate, letters of administration, certificate of
marriage or death, power of attorney or other document relating to or
affecting the title to any Notes.
6. DEATH OR BANKRUPTCY OF NOTEHOLDERS
6.1 The executors or administrators of a deceased Noteholder (not being one of
several joint holders) shall be the only persons recognised by the Company
as having any title to or interest in such Note.
6.2 In the case of the death of any of the joint holders of a Note the
survivors or survivor will be the only persons or person recognised by the
Company as having any title to or interest in such Note.
6.3 Any person becoming entitled to Notes in consequence of the death or
bankruptcy of any Noteholder or of any other event giving rise to the
transmission of such Notes by operation of law may, upon producing such
evidence that he sustains the character in respect of which he proposes to
act under this paragraph or of his title as the Directors shall think
sufficient, be registered himself as the holder of the Note or subject to
the preceding paragraphs may transfer the Note.
7. RECEIPT OF JOINT HOLDERS
If several persons are entered in the register as joint registered holders
of any Notes then, without prejudice to paragraph 2 above, the receipt of
any one of such persons for any interest or principal or other moneys
payable in respect of such Notes shall be as effective a discharge to the
Company as if the person signing such receipt were the sole registered
holder of such Notes.
8. THE REGISTER
8.1 A Noteholder and any person authorised by him may at all reasonable times
during office hours inspect the Register and upon payment of a reasonable
charge take copies of, or extracts from, the Register or any part of it.
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<PAGE>
8.2 The Register may be closed by the Company for such periods and at such
times (not exceeding 30 business days in any one year) as it may think fit
and during such period the Company shall be under no obligation to register
transfers of the Notes.
9. REPLACEMENT OF CERTIFICATES
If the certificate for any Notes is lost, defaced or destroyed, it may be
renewed, on such terms (if any) as to evidence and indemnity as the
Directors may require, but so that in the case of defacement the defaced
certificate shall be surrendered before the new certificate is issued.
10. RISK TO NOTEHOLDERS
All certificates, other documents and remittances sent through the post
shall be sent at the risk of the Noteholders entitled thereto.
- 18 -
<PAGE>
SCHEDULE 4
PROVISIONS FOR MEETINGS OF NOTEHOLDERS
1. CALLING OF MEETINGS
The Company at any time may, and shall upon the request in writing signed
by Noteholders holding not less than one-tenth in nominal value of the
Notes for the time being outstanding, convene a meeting of the Noteholders.
Every such meeting and every adjourned meeting shall be held at the
registered office of the Company for the time being or such other place as
the Company may specify.
2. NOTICE OF MEETINGS
At least 21 days' notice (exclusive of the day on which the notice is given
or deemed to be given and the day on which the meeting is to be held)
specifying the day, time and place of meeting shall be given to the
Noteholders of any meeting of the Noteholders. Any such notice shall
specify the terms of the resolutions to be proposed and shall include a
statement to the effect that proxies may be appointed in accordance with
the provisions of paragraph 15 of this schedule. No amendment (other than
an amendment to correct a typographical or manifest error) may subsequently
be made to the resolution(s) specified in the notice of meeting. The
accidental omission to give notice to, or the non-receipt of notice by, any
of the Noteholders shall not invalidate the proceedings at any meeting.
3. CHAIRMAN OF MEETINGS
Such person (who may, but need not, be a Noteholder) nominated in writing
by the Company shall be entitled to take the chair at every such meeting or
adjourned meeting. If at any meeting or adjourned meeting no person shall
be nominated or the person nominated shall not be present within 15 minutes
after the time appointed for the holding of such meeting or adjourned
meeting the Noteholders present shall choose one of their number to be
chairman.
4. QUORUM AT MEETINGS
At any such meeting two or more persons present in person (not being the
Company, any person directly or indirectly under the control of the Company
or any nominees thereof) or by proxy holding Notes or being proxies and
being or representing in the aggregate the holders of a majority in nominal
amount of the Notes then outstanding and not held by or on behalf of the
Company shall form a quorum for the transaction of business and no business
(other than the choosing of a chairman) shall be transacted at any meeting
unless the requisite quorum be present at the commencement of business.
5. ABSENCE OF QUORUM
If within half an hour from the time appointed for any such meeting a
quorum is not present, the meeting shall, if convened upon the requisition
of Noteholders, be dissolved.
- 19 -
<PAGE>
In any other case, the meeting shall stand adjourned for such period, not
being less than 14 days nor more than 42 days, and to such time and place
as may be appointed by the chairman. At such adjourned meeting two or more
persons present in person or by proxy (not being the Company, any person
directly or indirectly under the control of the Company or any nominee
thereof) holding Notes or being proxies (whatever the nominal amount of the
Notes which they hold or represent) shall form a quorum and shall have the
power to pass any resolution and to decide upon all matters which could
properly have been dealt with at the meeting from which the adjournment
took place had a quorum been present at such meeting.
6. NOTICE OF ADJOURNED MEETINGS
At least ten days' notice of any meeting adjourned through want of a quorum
shall be given in the same manner as of an original meeting and such notice
shall state the quorum required at such adjourned meeting. Subject as
aforesaid it shall not be necessary to give any notice of an adjourned
meeting.
7. ADJOURNMENT OF MEETINGS
The chairman may with the consent of (and shall if directed by) any meeting
adjourn the same from time to time and from place to place but no business
shall be transacted at any adjourned meeting except business which might
lawfully have been transacted at the meeting from which the adjournment
took place.
8. RESOLUTION ON A SHOW OF HANDS OR POLL
Every question submitted to a meeting shall be decided in the first
instance by a show of hands, and unless a poll is demanded (before or on
the declaration of the result of the show of hands) by the chairman, the
Company or by one or more persons holding Notes or being proxies and being
or representing in the aggregate the holders of not less than one-twentieth
of the nominal amount of the Notes then outstanding and not held by or on
behalf of the Company, a declaration by the chairman that the resolution
has been carried, or carried by a particular majority, or lost, or not
carried by any particular majority shall be conclusive evidence of the fact
without proof of the number or proportion of the votes recorded in favour
of or against such resolution.
9. MANNER OF TAKING POLL
If at any meeting a poll is so demanded it shall be taken in such manner
and, subject as hereinafter provided, either at once or after such an
adjournment as the chairman directs and the result of such poll shall be
deemed to be the resolution of the meeting at which the poll was demanded
as at the date of the taking of the poll. The demand for a poll shall not
prevent the continuance of the meeting for the transaction of any business
other than the question on which the poll has been demanded.
10. TIME FOR TAKING POLL
- 20 -
<PAGE>
Any poll demanded at any meeting on the election of a chairman or on any
question of adjournment shall be taken at the meeting without adjournment.
11. PERSONS ENTITLED TO ATTEND AND VOTE
Any persons duly authorised by the Company including without limitation the
Directors, the secretary or the Company's auditors or legal or financial
advisers shall be entitled to attend and speak at any meeting of the
Noteholders and any other person authorised in that behalf by the
Directors. Save as aforesaid no person shall be entitled to attend or vote
at any meeting of the Noteholders unless he is registered as a holder of
Notes or he produces written evidence of his appointment as a
representative pursuant to paragraph 20 or is a proxy. No votes may be
exercised in respect of Notes held by or for the account of the Company or
anyone directly or indirectly under the control of it, but this shall not
prevent any proxy from being a director, officer or representative of, or
otherwise connected with the Company.
12. VOTES
12.1 Subject as provided in paragraph 11 above, at any meeting:-
(a) on a show of hands every Noteholder who (being an individual) is
present in person or by proxy or (being a corporation) is present by
its representative duly authorised in accordance with paragraph 20
below or its proxy, shall have one vote; and
(b) on a poll every person who is so present shall have one vote in
respect of every 81p nominal of Notes of which he is the holder or in
respect of which he is a proxy or a representative.
12.2 Without prejudice to the obligations of any proxies any person entitled to
more than one vote need not use all his votes or cast all the votes to
which he is entitled in the same way.
13. VOTES OF JOINT HOLDERS
In the case of the joint holders of Notes the vote of the senior who
tenders a vote whether in person or by proxy shall be accepted to the
exclusion of the votes of the other joint holders and for this purpose
seniority shall be determined by the order in which the name stands in the
Register.
14. CASTING VOTE OF CHAIRMAN
In the case of an equality of votes, the chairman shall both on a show of
hands and on a poll have a casting vote in addition to the vote or votes
(if any) to which he may be entitled as a Noteholder or as a proxy or as a
representative.
15. APPOINTMENT OF PROXY
- 21 -
<PAGE>
15.1 Proxies named in any Form of Proxy (as defined below) or block voting
instruction need not be Noteholders.
15.2 A Noteholder may by instrument in writing (a "FORM OF PROXY") appoint a
proxy. The Form of Proxy shall be signed by the appointor or his attorney
duly authorised in writing or if the appointor is a corporation either
under the common seal or under the hand of an officer or attorney so
authorised. The Company may, but shall not be bound to, require evidence of
the authority of any such officer or attorney.
15.3 A Form of Proxy and the power of attorney or other authority (if any) under
which it is signed or a notarially certified copy of such power or
authority shall be deposited at such place as the Company may, in the
notice convening the meeting, direct or, if no such place is appointed,
then at the registered office of the Company not less than 48 hours before
the time appointed for holding the meeting at which the person named in the
Form of Proxy proposes to vote and in default the Form of Proxy shall not
be treated as valid. No Form of Proxy shall be valid after the expiration
of 12 months from the date named in it as the date of its execution.
15.4 A Form of Proxy may be in any usual or common form or in any other form
which the Company shall approve. A proxy shall, unless the contrary is
stated therein and subject to paragraph 15.3 above and paragraph 15.5
below, be valid as well for any adjournment of the meeting as for the
meeting to which it relates and need not be witnessed.
15.5 A vote given in accordance with the terms of a Form of Proxy shall be valid
notwithstanding the previous death or insanity of the principal or
revocation of the proxy or of the authority under which the proxy was
executed provided that no intimation in writing of such death insanity or
revocation shall have been received by the Company at its registered office
before the commencement of the meeting or adjourned meeting for the time
being at which the proxy is used.
16. POWERS OF MEETINGS OF NOTEHOLDERS
A meeting of the Noteholders shall in addition to all other powers (but
without prejudice to any powers conferred on other persons in the
instrument) have the following powers exercisable only by Extraordinary
Resolution namely:-
16.1 to sanction any proposal by the Company for any modification, abrogation,
variation or compromise of, or arrangement in respect of, the rights of the
Noteholders against the Company whether such rights shall arise under the
conditions, the instrument or otherwise;
16.2 to assent to any modification or abrogation of the conditions and of the
provisions of these presents which shall be proposed by the Company and to
authorise the Company to execute an instrument supplemental to this
instrument embodying any such modification or abrogation; and
- 22 -
<PAGE>
16.3 to appoint any persons (whether Noteholders or not) as a committee or
committees to represent the interests of the Noteholders and to confer upon
such committee or committees any powers or discretions which the
Noteholders could themselves exercise by Extraordinary Resolution.
17. EXTRAORDINARY RESOLUTION BINDING ON ALL NOTEHOLDERS
An Extraordinary Resolution passed at a meeting of the Noteholders duly
convened and held in accordance with this instrument shall be binding upon
all the Noteholders whether present or not at such meeting and each of the
Noteholders shall be bound to give effect thereto accordingly. The passing
of any such resolution shall be conclusive evidence that the circumstances
of any such resolution justify the passing thereof.
18. DEFINITION OF EXTRAORDINARY RESOLUTION
The expression "EXTRAORDINARY RESOLUTION" when used in this instrument
means a resolution passed at a meeting of the Noteholders duly convened and
held in accordance with the provisions contained herein by a majority
consisting of not less than 51 per cent of the persons voting thereat upon
a show of hands or, if a poll is demanded, then by a majority consisting of
not less than 51 per cent of the votes cast thereon.
19. MINUTES OF MEETINGS
Minutes of all resolutions and proceedings at every meeting shall be made
and duly entered in books to be from time to time provided for that purpose
by the Company and any such minutes, if they purport to be signed by the
chairman of the meeting at which such resolutions were passed or
proceedings were transacted or by the chairman of the next succeeding
meeting of the Noteholders, shall be conclusive evidence of the matters
therein contained and, until the contrary is proved, every meeting in
respect of which minutes of the proceedings have been made and signed as
aforesaid shall be deemed to have been duly held and convened and all
resolutions passed or proceedings transacted thereat to have been duly
passed and transacted.
20. CORPORATE REPRESENTATIVES
Any company or corporation which is a holder of Notes may by resolution of
its directors or other governing body authorise any person to act as its
representative at any meeting of Noteholders and such representative shall
be entitled to exercise the same powers on behalf of the company or
corporation which he represents as if he were the holder of Notes.
21. RESOLUTIONS IN WRITING
A resolution in writing proposed by the Company and signed by the holders
of not less than 51 per cent in nominal amount of the Notes then in issue
(other than Notes held by or for the account of the Company) shall have
effect in the same manner as an
- 23 -
<PAGE>
Extraordinary Resolution of Noteholders duly passed at a meeting duly
convened and held. Such resolution in writing may be contained in one
document or in several documents in like form, each signed by one or more
Noteholders.
22. CONSENT OF COMPANY
Notwithstanding anything in this instrument to the contrary, no resolution
shall be effective which would increase any obligation of the Company under
the instrument without the written consent of the Company.
- 24 -
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Clause Page
<S> <C>
1. INTERPRETATION 1
2. COVENANT TO COMPLY WITH THE TERMS OF THE NOTES 3
3. AMOUNT OF THE NOTES 3
4. ALLOTMENT AND PAYMENT UP OF THE NOTES 3
5. INTEREST 3
6. REPAYMENT 3
7. STATUS OF THE NOTES AND SUBORDINATION 4
8. CONVERSION 4
9. REGISTER 4
10. TRANSFER 4
11. NOTE CERTIFICATES 4
12. NOTICES 5
13. MODIFICATION OF RIGHTS 5
14. GOVERNING LAW 5
SCHEDULE 1
Form of Note 7
SCHEDULE 2
The Conditions 9
SCHEDULE 3
Provisions as to the Register 14
SCHEDULE 4
Provisions for Meetings of Noteholders 18
</TABLE>
- 25 -
<PAGE>
EXHIBIT 3.6
--------------------
| Draft Dated |
| 03/10/97, 9:53am |
--------------------
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
among
ALLIANCE RESOURCES PLC,
AND
LASALLE STREET NATURAL RESOURCES CORPORATION
----------------------------------------
Dated as of March __, 1997
----------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
1. Background........................................................ 1
----------
2. Registration Under Securities Act, etc............................ 1
---------------------------------------
2.1 Registration on Request...................................... 1
-----------------------
2.2 Incidental Registration...................................... 3
-----------------------
2.3 Registration Procedures...................................... 4
-----------------------
2.4 Underwritten Offerings....................................... 8
----------------------
2.5 Preparation; Reasonable Investigation........................ 8
-------------------------------------
2.6 Indemnification.............................................. 9
---------------
3. Definitions....................................................... 11
-----------
4. Rule 144 and Rule 144A............................................ 13
----------------------
5. Amendments and Waivers............................................ 13
----------------------
6. Notices........................................................... 13
-------
7. Assignment........................................................ 14
----------
8. Calculation of Percentage Interests of Registrable Securities..... 14
-------------------------------------------------------------
9. No Inconsistent Agreements........................................ 14
--------------------------
10. Severability...................................................... 14
------------
11. Entire Agreement.................................................. 14
----------------
12. Descriptive Headings.............................................. 14
--------------------
13. Governing Law..................................................... 14
-------------
14. Counterparts...................................................... 14
------------
15. Termination....................................................... 15
-----------
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT, dated as of March __, 1997 by and among
Alliance Resources Plc, (the "Company"), and LaSalle Street Natural Resources
Corporation ("LSNRC").
1. Background.
----------
(a) Pursuant to an Assignment of Overriding Royalty Interest,
dated as of the date hereof between the Company and LSNRC (the "Assignment"),
the Company has agreed to purchase from LSNRC in consideration for the issuance
by the Company to LSNRC of 1,500,000 of the Company's ordinary shares, par value
40p each (the "New Alliance Shares"), warrants to purchase ____________ New
Alliance Shares at an exercise price of __p per share (the "Bank Warrants").
Capitalized terms used in this Agreement but not otherwise defined have the
meanings given them in Section 3.
---------
(b) As an inducement to LSNRC to enter into the Assignment and
in satisfaction of a condition to the obligations of the Company under the
Assignment, the Company has agreed to register the New Alliance Shares
issuable pursuant to the Assignment and the New Alliance Shares issuable
upon exercise of LSNRC Warrants, upon the terms and subject to the conditions
contained in this Agreement.
2. Registration Under Securities Act, etc.
---------------------------------------
2.1 Registration on Request.
-----------------------
(a) Request. At any time, or from time to time, upon
-------
written request of one or more holders (the "Initiating Holders") of Registrable
Securities representing not less than 50% of the Registrable Securities that the
Company effect the registration under the Securities Act and any related
qualification under or compliance with blue sky or other state securities laws
of all or part of such Initiating Holders' Registrable Securities, the Company
promptly will give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company will use
its best efforts to effect, within 120 days after receiving such request for
registration, the registration (including, without limitation, the execution of
an undertaking to file post effective amendments and appropriate qualifications
under or other compliance with applicable blue sky or other state securities
laws) under the Securities Act of
(i) the Registrable Securities that the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities that the Company has
been requested to register by the holders thereof (such holders
together with the Initiating Holders hereinafter are referred to as the
"Selling Holders") by written request given to the Company within 30
days after the giving of such written notice by the Company, all to the
extent necessary to permit the disposition of the Registrable
Securities (in accordance with the methods of disposition thereof
intended by the Selling Holders) to be registered.
(b) Registration of Other Securities. Whenever the Company
--------------------------------
shall effect a registration pursuant to this Section 2.1, securities other than
-----------
Registrable Securities may be included in the registration; provided that, in
connection with an underwritten offering by one or
1
<PAGE>
more holders of Registrable Securities, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless (a) the managing underwriter of such offering shall have advised each
Selling Holder of Registrable Securities to be covered by such registration in
writing that the inclusion of such other securities would not adversely affect
such offering or (b) the Selling Holders of not less than 50% of all Registrable
Securities to be covered by such registration shall have consented in writing to
the inclusion of such other securities.
(c) Registration Statement Form. Registrations under this
---------------------------
Section 2.1 shall be on such appropriate registration form of the Commission (i)
- -----------
as shall be reasonably selected by the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the method or
methods of disposition intended by such holders.
(d) Effective Registration Statement. A registration
--------------------------------
requested pursuant to this Section 2.1 shall be deemed to have been effected if
-----------
(i) the Company shall have filed a registration statement as requested by the
holders and thereafter the holders shall have abandoned the intended sale of
their New Alliance Shares as contemplated by the registration statement
otherwise than for any failure on the part of the Company or (ii) (A) a
registration statement with respect thereto has become effective and remained
effective in compliance with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement; provided, that such
--------
period need not exceed 120 days (which period shall be increased by the
cumulative duration of all Blackout Periods), (B) after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason not attributable to such Selling Holder, or (C) the conditions to
closing specified in the purchase agreement or underwriting agreement, if any,
entered into in connection with such registration are not satisfied or waived,
by reason of a failure on the part of the Company.
(e) Selection of Underwriters. The underwriter or
-------------------------
underwriters of each underwritten offering of the Registrable Securities by one
or more holders of Registrable Securities in connection with a registration
requested pursuant to this Section 2.1 shall be selected by the Selling Holders
-----------
of at least 50% of the Registrable Securities to be included in such
registration and shall be reasonably acceptable to the Company.
(f) Priority in Requested Registration. If the managing
----------------------------------
underwriter of any underwritten offering pursuant to this Section 2.1 shall
-----------
advise the Company in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering within a price range acceptable to the Selling Holders of
more than 50% of the Registrable Securities requested to be included in such
registration, the Company will include in such registration, to the extent of
the number and type that the Company is so advised can be sold in such offering,
(A) first, all Registrable Securities requested to be included in such
registration, pro rata among the Selling Holders requesting such registration on
the basis of the estimated gross proceeds from the sale thereof and (B) second,
other securities to
2
<PAGE>
be included in such registration, to the extent of the number and type the
Company is so advised can be sold in such offering.
(g) Limitations on Registration on Request. The Company will
--------------------------------------
not be required to (i) file, in the aggregate, more than two registration
statements pursuant to this Section 2.1 each of which (A) has been declared or
-----------
ordered effective (including without limitation qualification under or other
compliance with state blue sky or securities laws requested) and which
effectiveness has not been suspended or stopped by any governmental or judicial
authority, and (B) remains continuously effective for a period of time not less
than the Effective Period, or (ii) effect a registration pursuant to this
Section 2.1 within the twelve-month period occurring immediately subsequent to
- -----------
the effectiveness (within the meaning of Section 2.1(d)) of a registration
---------------
statement filed pursuant to this Section 2.1.
-----------
(h) Notwithstanding the other provisions of this
Section 2.1, the Company shall not be obligated to effect a registration
- -----------
pursuant to this Section 2.1 during the period starting with the date 60 days
-----------
prior to the Company's good faith estimated date of filing of, and ending on a
date 120 days following the effective date of, a registration statement for the
underwritten public offering of securities for the account of the Company;
provided that the Company is at all times during that period diligently pursuing
such registration.
(i) Expenses. The Company will pay all Registration Expenses
--------
in connection with the registrations requested pursuant to this Section 2.1.
-----------
2.2 Incidental Registration.
-----------------------
(a) Right to Include Registrable Securities. If the Company
---------------------------------------
at any time proposes to register any of its securities under the Securities Act
by registration on Forms S-1, S-2, S-3, F-1, F-2 or F-3 or any successor or
similar form(s) (except registrations on such Forms or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or exchange and except for
registrations pursuant to Section 2.1) (and any related qualification under or
-----------
compliance with blue sky or other state securities laws), whether or not for
sale for its own account, it will each such time give prompt written notice to
all registered holders of Registrable Securities of its intention to do so and
of such holders' rights under this Section 2.2. Upon the written request of any
-----------
such holder (each, a "Requesting Holder") made as promptly as practicable and in
any event within 30 days after the receipt of any such notice (20 days if the
Company states in such written notice or gives telephonic notice to all
registered holders of Registrable Securities, with written confirmation to
follow promptly thereafter, stating that (i) such registration will be on Form
S-3 or F-3 and (ii) such shorter period of time is required because of a planned
filing date) (which request shall specify the Registrable Securities intended to
be disposed of by such Requesting Holder), the Company will use its best efforts
to effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by the Requesting
Holders thereof to the extent requisite to permit the disposition thereof in
accordance with the method or methods of disposition intended by such holders;
provided, however, that if, at any time after giving written notice of its
- -------- -------
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any
3
<PAGE>
obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to cause such registration to be
effected as a registration under Section 2.1, and (ii) in the case of a
-----------
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities.
(b) Priority in Incidental Registrations. If the managing
------------------------------------
underwriter of any underwritten offering pursuant to this Section 2.2 shall
-----------
advise the Company in writing that, in its opinion, the number or type of
Registrable Securities requested to be included in such registration exceeds the
number or type that can be sold in such offering within a price range acceptable
to the Company, then the Company will include in such registration, to the
extent of the number and type that the Company is so advised can be sold in such
offering, (A) first, all the securities proposed by the Company to be sold for
its own account and (B) second, such Registrable Securities requested to be
included in such registration pursuant to this Section 2.2, pro rata among each
-----------
of the Requesting Holders on the basis of the estimated gross proceeds from the
sale thereof, to the extent of the number and type the Company is so advised can
be sold in such offering.
(c) Expenses. The Company will pay all Registration Expenses
--------
in connection with any registration effected pursuant to this Section 2.2.
-----------
2.3 Registration Procedures.
-----------------------
(a) If and whenever the Company is required to use its best
efforts to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 2.1 and 2.2, the Company will, as
------------ ---
expeditiously as possible:
(i) prepare and (as soon as possible but in any event no
later than 60 days after the end of the period within which requests
for registration may be given to the Company pursuant to Section 2.1(a)
--------------
or 2.2(a), as applicable) file with the Commission the requisite
------
registration statement to effect such registration and thereafter use
its best efforts to cause such registration statement to become
effective as soon as practicable thereafter; provided, however, that
-------- -------
the Company may discontinue any registration of its securities that are
not Registrable Securities (and, under the circumstances specified in
Section 2.2, its securities that are Registrable Securities) at any
------- ---
time prior to the effective date of the registration statement relating
thereto;
(ii) prepare and file with the Commission such amendments,
supplements and post-effective amendments to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective (the "Effective
Period") 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 as all of Registrable Securities
covered by such registration statement have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set
4
<PAGE>
forth in such registration statement; provided, that such period need
--------
not exceed 180 days (which period shall be increased by the cumulative
duration of all Blackout Periods);
(iii) furnish to each seller of Registrable Securities
covered by such registration statement, such number of conformed copies
of such registration statement and of each such amendment, supplement
and post-effective amendment thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each 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 such other documents, as such seller may reasonably
request;
(iv) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states, possessions and territories of the United States of
America where an exemption is not available and as each seller of
Registrable Securities covered by such registration statement shall
reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect,
and (z) to take any other action that may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities to be sold by such seller, except that
the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not be but for the requirements of this subdivision
(iv) be obligated to be so qualified or to consent to general service
of process in any such jurisdiction;
(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, state or local governmental agencies
or authorities as may be necessary in the opinion of counsel to the
Company, to the seller or sellers of Registrable Securities or to the
underwriters to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities in accordance with the
method or methods of disposition intended by such seller or sellers;
(vi) furnish to each seller of Registrable Securities, and
each such seller's underwriters, if any, a signed counterpart of
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement and, if
applicable, the date of the closing under the underwriting
agreement, reasonably satisfactory in form and substance to
such seller, and
(y) a "comfort" letter, dated the effective date of
such registration statement and, if applicable, the date of
the closing under the underwriting agreement, signed by the
independent public accountants who have certified the
Company's financial statements included or incorporated by
reference in such registration statement,
5
<PAGE>
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings
of securities;
(vii) promptly 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 promptly prepare and furnish to it 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 holder 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 statements 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, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder, and furnish to each
such seller of Registrable Securities at least five business days prior
to the filing thereof a copy of any amendment, supplement or post-
effective amendment to such registration statement or prospectus and
shall not file any thereof to which any such seller shall have
reasonably objected on the grounds that such amendment, supplement or
post-effective amendment does not comply in all material respects with
the requirements of the Securities Act;
(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;
(x) use its best efforts to list all New Alliance Shares
covered by such registration statement on any securities exchange or
national market system on which New Alliance Shares covered by such
registration statement are then listed;
(xi) not later than the effective date of such
registration statement, provide a CUSIP number for all Registrable
Securities and provide the applicable transfer agent or trustee with
printed certificates for the Registrable Securities that are in a form
eligible for deposit with the Depositary Trust Company;
6
<PAGE>
(xii) in the event of the issuance of any stop order
suspending the effectiveness of such registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Securities for sale in
any jurisdiction, promptly notify each holder of Registrable Securities
in writing of such occurrence and use its best efforts promptly to
obtain the withdrawal of such order; and
(xiii) promptly notify each seller of Registrable Securities
covered by such registration statement (A) when such registration
statement or any post-effective amendment thereto has become effective
under the Securities Act and each applicable state law and (B) of any
request by the Commission or any other federal or state governmental
authority for amendments or supplements to a registration statement or
the related prospectus or for additional information.
(b) 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
by such seller as the Company may from time to time reasonably request in
writing. Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of any kind described in subdivision (a)(vi) of this
Section 2.3, 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 subdivision (a)(vi) of this
Section 2.3 and, 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.
(c) If, prior to the effectiveness of any registration
statement otherwise required to be prepared and filed by the Company pursuant to
Section 2.1, or while a registration statement that includes Registrable
- -----------
Securities is effective under Section 2.1 or Section 2.2, the Board of Directors
----------- -----------
of the Company determines in good faith either (i) that the filing of the
registration statement would have a material adverse effect on the Company (an
"Information Blackout") or (ii) that the Company is required, pursuant to the
Exchange Act, to prepare financial statements in connection with a material
acquisition or other event (a "Financial Statement Blackout"), and in either
such case shall furnish to each holder of Registrable Securities a statement
regarding such determination (the "Blackout Period"), then the Company's
obligation to effect such registration hereunder or to maintain the
effectiveness of the registration statement hereunder shall be deferred or
suspended for a period not to exceed 120 days after the Company's Board of
Directors makes such good faith determination; provided, that if any such
registration statement is effective, the Company may, upon written notice of an
Information Blackout or a Financial Statement Blackout, as the case may be, to
each holder of Registrable Securities, suspend sales of Registrable Securities
pursuant to such registration statement for the Blackout Period. If the Company
shall postpone the filing of a registration statement pursuant to the preceding
provisions of this paragraph, holders of Registrable Securities with respect to
which registration has been requested, shall have the right to withdraw the
request for registration by giving written notice to the
7
<PAGE>
Company within 30 days after receipt of the notice of postponement and, if such
withdrawal reduces the amount of Registrable Securities to be included in the
registration to less than 50% of all the Registrable Securities, the
registration will be withdrawn and such requested registration shall not be
counted for purposes of the requested registrations to which holders of
Registrable Securities are entitled pursuant to this Section 2.1.
-----------
2.4 Underwritten Offerings.
----------------------
(a) Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offerings by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
-----------
into an underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to each such
holder and the underwriters and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
that type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.6.
-----------
(b) Incidental Underwritten Offerings. If the Company at any
---------------------------------
time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
-----------
through one or more underwriters, then, if the holders of Registrable Securities
wish to have their Registrable Securities included in the registration
statement, those holders will enter into an underwriting agreement with the
underwriters for the offering, such agreement to be reasonably satisfactory in
form and substance to the Company and the underwriters and to contain such
representations and warranties by the holders and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.6.
-----------
2.5 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will (i) give the holders of Registrable
Securities registered or to be 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, supplement or post-effective amendment thereto, (ii) prior to the
filing of any document that is to be incorporated by reference into any such
registration statement or prospectus (after initial filing of the registration
statement), promptly provide copies of such document to the holders of
Registrable Securities covered by such registration statement and to the
managing underwriters, if any, (iii) make the Company's representatives
available for discussion of any such document referred to in the preceding
clauses (i) or (ii) and (iv) give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants 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.
8
<PAGE>
2.6 Indemnification.
---------------
(a) Indemnification by the Company. The Company will
------------------------------
indemnify and hold harmless, in the case of any registration statement filed
pursuant to Section 2.1 or 2.2, each seller of any Registrable Securities
----------- ---
covered by such registration statement and each other Person who participates as
an underwriter in the offering or sale of securities of the Company covered by
such registration statement and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act, and
their respective directors, officers, employees, stockholders, affiliates,
agents and partners, against any losses, claims, damages or liabilities, joint
or several, to which such seller, underwriter or controlling person or any such
director, officer or partner may become subject under the Securities Act or
otherwise, including, without limitation, the fees and expenses of legal
counsel, 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 (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment,
supplement or post-effective amendment thereto, (ii) 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 or (iii) any violation
by the Company, of the Securities Act, the Exchange Act, or any rule or
regulation promulgated thereunder applicable to the Company, or of any blue sky
or other state securities law or any rule of regulation promulgated thereunder
applicable to the Company, and the Company will reimburse each such seller,
underwriter and controlling person and each such director, officer and partner
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable 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 or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment, supplement or post-effective amendment in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such seller or underwriter, as the case may be; 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 other
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 omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such seller, underwriter or
controlling Person or any such director, officer or partner and shall survive
the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As a condition to
------------------------------
including any Registrable Securities in any registration statement, the Company
shall have received an undertaking satisfactory to it from the prospective
seller of such Registrable Securities, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in subdivision (a) of this
Section 2.6) the Company, and each director of the Company, each officer
- -----------
9
<PAGE>
of the Company and each other Person, if any, who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls the Company or any such underwriter within the meaning of the
Securities Act, with respect to any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the 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, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller. 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 or controlling Person and shall
survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
----------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.6,
-----------
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
-------- -------
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 2.6, 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 party,
the indemnifying party shall be entitled to participate in and, unless the
indemnified party has been advised in writing by counsel that a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, 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 party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. If, the indemnified party has been advised in writing by counsel
that a conflict of interest may exist between such Person and the indemnifying
party with respect to such claim, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such Person if such
Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party that is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim. No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation or that
requires action other than the payment of money by the indemnifying party.
10
<PAGE>
(d) Contribution. If the indemnification provided for in
------------
this Section 2.6 shall for any reason be held by a court to be unavailable to an
-----------
indemnified party under subparagraph (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action or proceeding in respect thereof,
then, in lieu of the amount paid or payable under subparagraph (a) or (b)
hereof, the indemnified party and the indemnifying party under subparagraph (a)
or (b) hereof shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending the same), (i) in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party that resulted in such loss, claim, damage or liability, or
action or proceeding in respect thereof, with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the indemnified party and the
indemnifying party from the offering of the securities covered by such
registration statement. 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. Such prospective sellers' obligations to contribute as
provided in this subparagraph (d) are several and not joint. In addition, no
Person shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and contribution
---------------------
similar to that specified in the preceding subdivisions of this Section 2.6
-----------
(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 any federal or state law or regulation of any
governmental authority other than the Securities Act.
(f) Indemnification Payments. The indemnification and
------------------------
contribution required by this Section 2.6 shall be made by periodic payments of
-----------
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
3. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Blackout Period" is defined in Section 2.3.
--------------- -----------
"Commission" means the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
------------
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934,
11
<PAGE>
as amended, shall include a reference to the comparable section, if any, of any
such similar federal statute.
"Initiating Holder" is defined in Section 2.1.
----------------- -----------
"Person" means any individual, corporation, partnership, trust, estate,
------
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
"Registrable Securities" means the New Alliance Shares issuable to the
----------------------
Bank pursuant to the Assignment, the New Alliance Shares issuable upon exercise
of LSNRC Warrants and all Related Registrable Securities. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold to the public as permitted by Rule 144,
Regulation S or any other successor provision under the Securities Act, (c) they
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 distribution of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force or (d)
they shall have ceased to be outstanding. All references to percentages of
Registrable Securities shall be calculated pursuant to Section 8.
---------
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Section 2, including, without limitation, all
---------
registration, filing, NASD, listing fees, all fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audit or "cold comfort" letters required by or incident
to such performance and compliance, but excluding any underwriting discounts or
commissions with respect to the Registrable Securities.
"Related Registrable Securities" means any securities of the Company
------------------------------
issued or issuable with respect to any Registrable Securities by way of a
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such similar federal statute.
"Selling Holder" is defined in Section 2.1.
-------------- -----------
12
<PAGE>
4. Rule 144 and Rule 144A. The Company shall take all actions necessary
----------------------
or reasonably requested by any holder of Registrable Securities to enable
holders of Registrable Securities to sell such securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, (b) Rule 144A under the Securities Act, as such Rule may be amended from
time to time, and (c) any similar rules or regulations hereafter adopted by the
Commission, including, without limiting the generality of the foregoing, filing
on a timely basis all reports required to be filed by the Exchange Act (or, if
the Company is not required to file such reports, making publicly available, at
the request of any holder of Registrable Securities, other information necessary
to enable such holder to sell such securities pursuant to such rule); provided
--------
that this provision will not prohibit the Company from ceasing to be registered
pursuant to Section 12 of the Exchange Act. 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.
5. Amendments and Waivers. This Agreement may be amended with the
----------------------
consent of the Company 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 at least 50% of the Registrable
Securities affected by such amendment, action or omission to act. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
---------
Securities shall have been marked to indicate such consent.
6. Notices. All notices, demands and other communications provided for
-------
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telex, telegram,
telecopier, courier service or personal delivery:
(a) if to LSNRC, addressed to them in the manner set forth
in the Assignment, or at such other address as they shall have furnished to the
Company in writing;
(b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing, or,
until any such other holder so furnishes to the Company an address, then to and
at the address of the last holder of such Registrable Securities who has
furnished an address to the Company; or
(c) if to the Company, addressed to it in the manner set
forth in the Assignment, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered, if
mailed; when answered back, if telexed; and when receipt is confirmed, if
telecopied.
13
<PAGE>
7. Assignment. Neither party may assign its rights or obligations under
----------
this Agreement without the consent of the other party. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and, with respect to the Company, its respective successors and assigns
and, with respect to each Purchaser, its successors and assigns, including any
holder of any Registrable Securities, subject to the provisions respecting the
minimum numbers of percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
8. Calculation of Percentage Interests of Registrable Securities. For
-------------------------------------------------------------
purposes of this Agreement, all references to a percentage of the Registrable
Securities shall be calculated based upon the number of shares of the
Registrable Securities with respect to which such calculation is required to be
made, assuming the exercise of all Bank Warrants into New Alliance Shares at the
then-current exercise price.
9. No Inconsistent Agreements. The Company will not hereafter enter into
--------------------------
any agreement with respect to its securities that is inconsistent or conflicts
with this Agreement or the rights granted to the holders of Registrable
Securities in this Agreement.
10. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any jurisdiction, in any respect and for
any reason, the validity, legality and enforceability of any such provision in
every other respect, and in any other jurisdiction, and of the remaining
provisions contained herein shall not be in any way impaired thereby.
11. Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement (including the schedules and exhibits thereto) and LSNRC Warrants is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein or therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, the Purchase
Agreement (including the schedules and exhibits thereto) and the Warrants
supersede all prior agreements and understandings between the parties hereto
with respect to such subject matter.
12. 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.
13. 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 Illinois applicable to agreements made and to be performed entirely
within such State.
14. 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.
14
<PAGE>
15. Termination. Notwithstanding anything to the contrary in this
-----------
Agreement, this Agreement shall terminate with respect to any holder on the
earlier to occur of (a) the date that the number of Registrable Securities held
by the holder is less than 1/2% of the Company's outstanding New Alliance
Shares and no Registrable Securities held by the holder are required to bear a
legend restricting their transfer as "restricted securities" under Rule 144 or
(b) seven years from the date of this Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
15
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
COMPANY:
ALLIANCE RESOURCES PLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BANK:
BANK OF AMERICA NT & SA
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE>
Exhibit 3.7
THE COMPANIES ACTS 1985 AND 1989
________________________
COMPANY LIMITED BY SHARES
________________________
ARTICLES OF ASSOCIATION
(adopted by special resolution passed on 1997)
- of -
ALLIANCE RESOURCES PLC
________________________
PRELIMINARY
1. The regulations contained in Table A in the schedule to The Companies
(Tables A to F) Regulations 1985 and in any Table A applicable to the
Company under any former enactment relating to companies shall not apply to
the Company except in so far as they are repeated or contained in these
Articles.
2. In these Articles, unless the context otherwise requires:-
"STATUTES" means the Companies Act 1985 as amended by the Companies Act
1989, the Companies Act 1989 and every other statute or subordinate
legislation for the time being in force concerning companies and affecting
the Company including every amendment or re-enactment (with or without
amendment) thereof for the time being in force;
"ARTICLES" means these Articles of Association as altered from time to
time;
"AUDITORS" means the Auditors for the time being of the Company;
"CLEAR DAYS' NOTICE" means that the notice shall be exclusive of the day on
which it is served or deemed to be served and of the day for which it is
given or on which it is to take effect;
"DIRECTORS" means the Directors for the time being of the Company, or, as
the case may be, the board of directors for the time being of the Company
or the persons present at a
<PAGE>
duly convened meeting of the board of directors or any duly authorised
committee thereof at which a quorum is present;
"DIVIDEND" includes bonus;
"MONTH" means calendar month;
"OFFICE" means the registered office for the time being of the Company;
"PAID UP" includes credited as paid up;
"REGISTER" means the Register of Members of the Company required to be kept
by the Statutes;
"REGULATED ENTITY" means (i) any entity that is a "bank holding company"
(as defined in Section 2(a) of the U.S. Bank Holding Company Act of 1956,
as amended, (the "BHC Act")) or any non-bank subsidiary of such an entity
or (ii) any entity that, pursuant to Section 8(a) of the U.S. International
Banking Act of 1978, as amended, is subject to the provisions of the BHC
Act or any non-bank subsidiary of such an entity;
"SEAL" means the common seal of the Company;
"SECRETARY" includes a joint, deputy or assistant secretary, and any person
appointed by the Directors to perform the duties of the Secretary of the
Company;
"UNCERTIFICATED SECURITIES REGULATIONS" means the Uncertificated Securities
Regulations 1995, including any statutory modification or re-enactment for
the time being in force;
"UNITED KINGDOM" means Great Britain and Northern Ireland;
"IN WRITING" and "WRITTEN" includes printing, lithography, typewriting,
photography and other modes of representing or reproducing words in visible
form.
Words importing the singular number only shall include the plural, and vice
versa.
Words importing the masculine gender only shall include the feminine
gender.
Words importing individuals and words importing persons shall include
bodies corporate and unincorporated associations.
Any reference herein to the provisions of any Act or of any subordinate
legislation shall include any amendment or re-enactment (with or without
amendment) thereof for the time being in force.
Subject as aforesaid, and unless the context otherwise requires, words and
expressions defined in the Statutes shall bear the same meanings in these
Articles.
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A Special or Extraordinary Resolution shall be effective for any purpose
for which an Ordinary Resolution is expressed to be required under any
provision of these Articles.
SHARES
3. The capital of the Company as at the date of the adoption of these Articles
as the Articles of Association of the Company is ?? divided into shares of
40 pence each.
4. Without prejudice to any special rights previously conferred on the holders
of any existing shares or class of shares, any share in the Company may be
issued with such rights (including preferred, deferred or other special
rights) or such restrictions, whether in regard to dividend, voting, return
of capital or otherwise as the Company may from time to time by Ordinary
Resolution determine (or, in the absence of any such determination, as the
Directors may determine).
5. Subject to the provisions of the Statutes:-
5.1 any shares may be issued which are to be redeemed or are liable to be
redeemed at the option of the Company or the shareholder on such terms and
in such manner as may be provided by these Articles; and
5.2 the Company may purchase any of its own shares (including any redeemable
shares).
6. The Company shall not give any financial assistance for the acquisition of
shares in the Company except and in so far as permitted by the Statutes.
7. The shares of the Company shall not be allotted at a discount and save as
permitted by the Statutes shall not be allotted except as paid up at least
as to one-quarter of their nominal value and the whole of any premium
thereon.
8. The Company may exercise the powers of paying commissions conferred by the
Statutes to the full extent thereby permitted. Such commission may be
satisfied by the payment of cash or the allotment of fully or partly paid
shares or partly in one way and partly in the other. The Company may also
on any issue of shares pay such brokerage as may be lawful.
9. Save as otherwise provided in the Statutes or in these Articles, all
unissued shares (whether forming part of the original or any increased
capital) shall be at the disposal of the Directors who may (subject to the
provisions of the Statutes) allot (with or without conferring a right of
renunciation), grant options over, offer or otherwise deal with or dispose
of them to such persons at such times and generally on such terms and
conditions as they may determine. The Directors may at any time after the
allotment of any share but before any person has been entered in the
Register as the holder, recognise a renunciation thereof by the allottee in
favour of some other person and may accord to any allottee of a share a
right to effect such renunciation upon and subject to such terms and
conditions as the Directors may think fit to impose.
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10. Except as required by law or pursuant to the provisions of these Articles,
no person shall be recognised by the Company as holding any share upon any
trust, and (except only as by these Articles or by law otherwise provided
or under an order of a court of competent jurisdiction) the Company shall
not be bound by or be compelled in any way to recognise (even when having
notice thereof) any equitable, contingent, future or partial interest in
any share or any interest in any fractional part of a share or any other
rights in respect of any share except an absolute right to the entirety
thereof in the registered holder.
SHARE CERTIFICATES
11. Every share certificate shall specify the number and class and the
distinguishing number (if any) of the shares to which it relates and the
amount paid up thereon. No certificate shall be issued relating to shares
of more than one class.
12. Every person (other than a recognised clearing house (within the meaning of
the Financial Services Act 1986) or a nominee of a recognised clearing
house or of a recognised investment exchange (within the meaning of the
Financial Services Act 1986) in respect of whom the Company is not by law
required to complete and have ready for delivery a certificate) whose name
is entered as a Member on the Register shall be entitled without payment to
receive within two months after allotment or lodgement of transfer (or
within such other period as the conditions of issue shall provide) one
certificate for all the shares registered in his name or, in the case of
shares of more than one class being registered in his name, a separate
certificate for each class of shares so registered, and where a Member
(except such a clearing house or nominee) transfers part of the shares of
any class registered in his name he shall be entitled without payment to
one certificate for the balance of shares of that class retained by him.
If a Member shall require additional certificates he shall pay for each
additional certificate such reasonable sum (if any) as the Directors may
determine.
13. In respect of shares of one class held jointly by more than one person the
Company shall not be bound to issue more than one certificate, and delivery
of a certificate for such shares to one of the joint holders of such shares
shall be sufficient delivery to all such holders.
14. If any certificate be defaced then upon delivery thereof to the Directors
they may order the same to be cancelled and may issue a new certificate in
lieu thereof; and if any certificate be worn out, lost or destroyed, then
upon proof thereof to the satisfaction of the Directors and on such
indemnity with or without security as the Directors deem adequate being
given, a new certificate in lieu thereof shall be given to the party
entitled to such worn out, lost or destroyed certificate.
15. Every certificate issued under the last preceding Article shall be issued
without payment, but there shall be paid to the Company such exceptional
out-of-pocket expenses of the Company in connection with the request
(including, without limiting the generality of the foregoing, the
investigation of such request and the preparation and execution of any such
indemnity or security) as the Directors think fit.
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VARIATION OF RIGHTS
16. If at any time the share capital is divided into different classes of
shares, the rights attached to any class or any of such rights may,
subject to the provisions of the Statutes, whether or not the Company is
being wound up, be modified, abrogated or varied with the consent in
writing of the holders of three-fourths in nominal value of the issued
shares of that class, or with the sanction of an Extraordinary Resolution
passed at a separate General Meeting of the holders of the shares of that
class.
17. To every such separate General Meeting the provisions of sections 369, 370,
376 and 377 of the Companies Act 1985 and the provisions of these Articles
relating to General Meetings shall, mutatis mutandis, so far as applicable
apply, subject to the following provisions, namely:-
17.1 the necessary quorum at any such meeting, other than an adjourned meeting,
shall be two persons holding or representing by proxy at least one-third in
nominal value of the issued shares of the class in question and at an
adjourned meeting one person holding shares of the class in question or his
proxy;
17.2 any holder of shares of the class in question present in person or by proxy
may demand a poll; and
17.3 every holder of shares of the class in question present in person or by
proxy shall be entitled on a poll to one vote for every share of that class
held by him.
18. The rights attached to any class of shares shall, unless otherwise
expressly provided by the terms of issue of the shares of that class or by
the terms upon which such shares are for the time being held, be deemed not
to be modified, abrogated or varied by the creation or issue of further
shares ranking pari passu therewith.
CALLS ON SHARES
19. The Directors may, subject to the terms of allotment thereof, from time to
time make such calls upon the Members as they think fit in respect of any
moneys unpaid on their shares (whether on account of the nominal value of
the shares or by way of premium) and each Member shall (subject to the
Company serving on him at least 14 days' notice specifying the time or
times and place of payment) pay to the Company at the time or times and
place so specified the amount called on his shares. A call may be revoked
or postponed, in whole or in part, as the Directors may determine. A
person upon whom a call is made shall remain liable for all calls made upon
him notwithstanding the subsequent transfer of the shares in respect of
which the call was made.
20. A call shall be deemed to have been made at the time when the resolution of
the Directors authorising the call was passed and may be required to be
paid by instalments.
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21. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
22. If a sum payable in respect of any call or instalment is not paid on or
before the day appointed for payment thereof, the person from whom it is
due shall pay interest on the sum at such rate, not exceeding 15 per cent.
per annum, as the Directors may determine from the day appointed for the
payment thereof until the actual payment thereof, and all expenses that may
have been incurred by the Company by reason of such non-payment; but the
Directors may, if they shall think fit, waive the payment of such interest
and expenses or any part thereof.
23. Any sum which by the terms of issue of a share becomes payable on allotment
or at any fixed date, whether on account of the nominal value of the share
or by way of premium, shall for the purposes of these Articles be deemed to
be a call duly made and payable on the date on which by the terms of issue
the same becomes payable, and in case of non-payment all the relevant
provisions of these Articles as to payment of interest and expenses,
forfeiture or otherwise shall apply as if such sum had become payable by
virtue of a call duly made and notified.
24. The Directors may, on the issue of shares, make arrangements for a
difference between the holders of such shares in the amounts of calls to be
paid and in the times of payment of such calls.
25. The Directors may, if they think fit, receive from any Member willing to
advance the same all or any part of the moneys, whether on account of the
nominal value of the shares or by way of premium, uncalled and unpaid upon
any shares held by him; and upon all or any of the moneys so paid in
advance the Directors may (until the same would, but for such advance,
become presently payable) pay interest at such rate not exceeding (unless
the Company in General Meeting shall otherwise direct) 12 per cent. per
annum, as may be agreed upon between the Directors and the Member paying
such moneys in advance.
FORFEITURE AND LIEN
26. If any Member fails to pay any call or instalment in full on or before the
day appointed for payment thereof, the Directors may, at any time
thereafter, serve a notice on him requiring him to pay so much of the call
or instalment as is unpaid, together with any interest which may have
accrued and any expenses incurred by the Company by reason of such non-
payment.
27. The notice shall name a further day (not earlier than the expiration of 14
days from the date of service of the notice) on or before which, and the
place where, such call or instalment and such interest and expenses as
aforesaid are to be paid. The notice shall also state that in the event of
non-payment at or before the time and at the place appointed, the shares in
respect of which such call or instalment is payable will be liable to be
forfeited.
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28. If the requirements of any such notice as aforesaid are not complied with,
any share in respect of which such notice has been given may at any time
thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors to that effect. Such forfeiture
shall extend to all dividends declared and other moneys payable in respect
of the shares so forfeited and not actually paid before such forfeiture.
Forfeiture shall be deemed to occur at the time of the passing of the said
resolution of the Directors. The Directors may accept a surrender of any
share liable to be forfeited hereunder upon such terms and conditions as
they think fit.
29. When any share has been forfeited notice of the forfeiture shall be served
upon the person who was before forfeiture the holder of the share, or any
person entitled to the share by transmission, and an entry of the
forfeiture or surrender, with the date thereof, shall forthwith be made in
the Register, but no forfeiture or surrender shall be invalidated by any
failure to give such notice or make such entry as aforesaid.
30. A share so forfeited or surrendered shall be deemed to be the property of
the Company, and may be sold, re-allotted or otherwise disposed of either
to the person who was, before forfeiture, the holder or to any other person
in such manner, either subject to or discharged from all calls made or
instalments due prior to the forfeiture or surrender, as the Directors
think fit: Provided that the Company shall not exercise any voting rights
in respect of such share and any such share not disposed of in accordance
with the foregoing within a period of three years from the date of its
forfeiture or surrender shall thereupon be cancelled in accordance with the
provisions of the Statutes. For the purpose of giving effect to any such
sale or other disposition the Directors may authorise some person to
transfer the share so sold or otherwise disposed of to, or in accordance
with the directions of, the purchaser thereof or other person becoming
entitled thereto.
31. The Directors may, at any time before any share so forfeited or surrendered
shall have been cancelled or sold, re-allotted or otherwise disposed of,
annul the forfeiture or surrender upon such terms as they think fit.
32. Any person whose shares have been forfeited or surrendered shall cease to
be a Member in respect of those shares and shall surrender to the Company
for cancellation the certificate for the forfeited or surrendered shares,
but shall, notwithstanding such forfeiture or surrender, remain liable to
pay to the Company all moneys which, at the date of the forfeiture or
surrender, were presently payable by him to the Company in respect of the
shares, together with interest thereon at such rate, not exceeding 15 per
cent. per annum, as the Directors may determine from the time of forfeiture
or surrender until the time of payment, but his liability shall cease if
and when the Company shall have received payment in full of all such moneys
in respect of the shares, together with interest as aforesaid. The
Directors may, if they shall think fit, waive the payment of such interest
or any part thereof. The Company may enforce payment of such moneys
without being under any obligation to make any allowance for the value of
the shares forfeited or surrendered or for any consideration received on
their disposal.
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33. The Company shall have a first and paramount lien on every share (not being
a fully paid share) for all moneys (whether presently payable or not)
called or payable at a fixed time in respect of such share; but the
Directors may at any time waive any lien which has arisen and may declare
any share to be wholly or in part exempt from the provisions of this
Article. The Company's lien, if any, on a share shall extend to all
amounts payable in respect of it.
34. The Company may sell, in such manner as the Directors think fit, any share
on which the Company has a lien, but no sale shall be made unless a sum in
respect of which the lien exists is presently payable, nor until the
expiration of 14 days after a notice in writing, (i) stating, and
demanding payment of, the sum presently payable, and (ii) giving notice of
intention to sell in default of such payment, has been given to the
registered holder for the time being of the share, or the person entitled
thereto by reason of his death or bankruptcy or otherwise by operation of
law.
35. The net proceeds of such sale, after payment of the costs thereof, shall be
applied in or towards satisfaction of such part of the amount in respect of
which the lien exists as is presently payable. The residue, if any, shall
(subject to a like lien for sums not presently payable as existed upon the
shares before the sale) be paid to the person entitled to the shares at the
date of sale. For giving effect to any such sale the Directors may
authorise some person to transfer the shares sold to, or in accordance with
the directions of, the purchaser.
36. A statutory declaration in writing that the declarant is a Director or the
Secretary of the Company, and that a share has been duly forfeited or
surrendered or sold to satisfy a lien of the Company on a date stated in
the declaration, shall be conclusive evidence of the facts stated therein
against all persons claiming to be entitled to the share. Such declaration
and the receipt of the Company for the consideration (if any) given for the
share on the sale, re-allotment or disposal thereof, together with the
share certificate delivered to a purchaser or allottee thereof, shall
(subject to the execution of a transfer if the same be required) constitute
a good title to the share and the person to whom the share is sold, re-
allotted or disposed of shall be registered as the holder of the share and
shall not be bound to see to the application of the purchase money (if any)
nor shall his title to the share be affected by any irregularity or
invalidity in the proceedings in reference to the forfeiture, surrender,
sale, re-allotment or disposal of the share.
UNCERTIFICATED SHARES - GENERAL
37.
37.1 Uncertificated shares are not to be regarded as forming a separate class
from certificated shares of that class.
37.2 In relation to any share which is for the time being held in uncertificated
form:
(a) the Company may utilise the relevant system in which it is held to the
fullest extent available from time to time in the exercise of any of
its powers of functions under the Statutes or these articles or
otherwise in effecting any action and the board may
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from time to time determine the manner in which such powers, functions
and actions shall be so exercised or affected;
(b) any provision in these articles which is inconsistent with:
(i) the holding or transfer of that share in the manner prescribed
or permitted by the statutes;
(ii) any other provision of the Statutes relating to shares held in
uncertificated form; or
(iii) the exercise of any powers or functions by the Company or the
effecting by the Company of any actions by means of a relevant
system,
shall not apply;
(c) the Company may, by notice in writing to the holder of any such
shares, require the holder to change the form of such shares to
certificated form within such period as may be specified in the notice
and if the holder does not comply, the Directors may authorise a
person to take such steps in the name of the holder as may be required
to change the form; and
(d) the Company shall not issue a certificate.
37.3 For the purpose of effecting any actions by the Company, the directors may
determine that holdings of the same member in uncertificated form and in
certificated form shall be treated as separate holdings.
37.4 A member may, in accordance with the Uncertificated Securities Regulations,
change a share of a class which is a participating security from
certificated form to uncertificated form, and from uncertificated form to
certificated form.
TRANSFER OF SHARES
38.
38.1 The Company shall register the transfer of any shares held in
uncertificated form in accordance with the Statutes. Subject to the
requirements of the London Stock Exchange, the Directors may, in their
absolute discretion and without giving any reason for their decision,
refuse to register any transfer of an uncertificated share where permitted
by the Statutes.
38.2 All transfers of certificated shares shall be effected by instrument in
writing in any usual or common form or any other form which the Directors
may approve. The instrument of transfer of any certificated share in the
Company shall be signed by or on behalf of the transferor (and, in the case
of a share which is not fully paid, shall be signed by or on behalf of the
transferee). The transferor shall be deemed to remain the holder of the
share until the name of the transferee is entered in the Register in
respect thereof.
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38.3 The Directors may, in their absolute discretion and without assigning any
reason therefor, refuse to register any transfer of any certificated share
which is not a fully paid share. The Directors may likewise refuse to
register any transfer of a share, whether fully paid or not, in favour of
more than four persons jointly.
39. For so long as any Regulated Entity holds more than 5.0% of the outstanding
Ordinary Shares, such Regulated Entity may transfer its Ordinary Shares
only under the following circumstances: (i) in a widely distributed public
offering; (ii) in a transfer pursuant to Rule 144 under the United States
of America ("U.S.") Securities Act 1933, as amended, or any similar rule
then in force; (iii) in a transfer constituting two percent or less of the
outstanding Ordinary Shares; (iv) in a transfer to a person if a person
already owns or has negotiated to purchase at least a majority of the
Ordinary Shares (not including the sale from the Regulated Entity); (v) in
a transfer to the Company; (vi) in a transfer to an affiliate of such
holder or any other Regulated Entity; or (vii) in any method of transfer
permitted by the Board of Governors of the Federal Reserve System of the
U.S. Once such Regulated Entity holds 5.0% or less of the outstanding
Ordinary Shares, the foregoing restrictions on transfer shall cease to
apply to such holder. For the purposes of this Article 39, the term
"affiliate" shall have the meaning ascribed to it in Section 225.2 of
Regulation Y promulgated by the Board of Governors of the US Federal
Reserve System.
40. The Directors:-
40.1 shall decline to register any instrument of transfer which, to their actual
knowledge, would be in breach of Article 39, but provided that no liability
shall attach to the Directors for registering a transfer in breach of the
provisions of Article 39 unless they have actual notice of such breach; and
40.2 may decline to recognise any instrument of transfer unless:-
(a) the instrument of transfer is left at the Office, or at such other
place as the Directors may from time to time determine, accompanied by
the certificate(s) of the shares to which it relates and such other
evidence as the Directors may reasonably require to show the right of
the transferor to make the transfer (and, if the instrument of
transfer is executed by some other person on his behalf, the authority
of that person so to do); and
(b) the instrument of transfer is in respect of only one class of share.
41. If the Directors refuse to register a transfer they shall, within two
months after the date on which the transfer was lodged with the Company,
send to the transferee notice of the refusal and (except in the case of
fraud) return to him the instrument of transfer. All instruments of
transfer which are registered may be retained by the Company.
42. No fee shall be charged by the Company on the registration of any
instrument of transfer, probate, letters of administration, certificate of
death or marriage, power of attorney, stop
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notice or other document or instruction relating to or affecting the title
to any shares or otherwise for making any entry in the Register affecting
the title to any shares.
43. The registration of transfers may be suspended at such times and for such
periods as the Directors may from time to time determine, and either
generally or in respect of any class of shares: Provided always that such
registration shall not be suspended, either generally or otherwise, for
more than 30 days in any year.
44. The Company shall be entitled to destroy:-
44.1 any instrument of transfer or other document which has been registered, or
on the basis of which registration was made, at any time after the
expiration of six years from the date of registration thereof;
44.2 any dividend mandate or any variation or cancellation thereof or any
notification of change of address, at any time after the expiration of two
years from the date of recording thereof; and
44.3 any share certificate which has been cancelled, at any time after the
expiration of one year from the date of such cancellation,
and it shall conclusively be presumed in favour of the Company that every
entry in the Register purporting to have been made on the basis of an
instrument of transfer or other document so destroyed was duly and properly
made, that every instrument of transfer so destroyed was a valid and
effective instrument duly and properly registered, that every share
certificate so destroyed was a valid certificate duly and properly
cancelled and that every other document destroyed hereunder was a valid and
effective document in accordance with the recorded particulars thereof in
the books or records of the Company: Provided always that:-
(a) the provisions aforesaid shall apply only to the destruction of a
document in good faith and without express notice to the Company that
the preservation of such document was relevant to any claim
(regardless of the parties thereto);
(b) nothing contained in this Article shall be construed as imposing upon
the Company any liability in respect of the destruction of any such
document earlier than as aforesaid or in any case where the conditions
of proviso (a) above are not fulfilled; and
(c) references in this Article to the destruction of any document include
references to its disposal in any manner.
TRANSMISSION OF SHARES
45. In case of the death of a Member the survivor or survivors where the
deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole or only
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surviving holder, shall be the only persons recognised by the Company as
having any title to his interest in the shares; but nothing herein
contained shall release the estate of a deceased Member from any liability
in respect of any share which had been solely or jointly held by him.
46. Any person becoming entitled to a share in consequence of the death or
bankruptcy of a Member or otherwise by operation of law may, upon such
evidence being produced as may from time to time properly be required by
the Directors and subject as hereinafter provided, elect either to be
registered himself as holder of the share or to have some person nominated
by him registered as the transferee thereof, but the Directors shall, in
either case, have the same right to decline or suspend registration as they
would have had in the case of a transfer of the share by the Member
registered as the holder of any such share before his death or bankruptcy
or other event, as the case may be.
47. If the person so becoming entitled shall elect to be registered himself, he
shall deliver or send to the Company a notice in writing signed by him
stating that he so elects. If he shall elect to have another person
registered he shall testify his election by executing to that person a
transfer of the share. All the limitations, restrictions and provisions of
these Articles relating to the right to transfer and the registration of
transfers of shares shall be applicable to any such notice or transfer as
aforesaid as if the death or bankruptcy of the Member or other event had
not occurred and the notice or transfer were a transfer signed by the
Member registered as the holder of any such share.
48. A person becoming entitled to a share by reason of the death or bankruptcy
of the holder or otherwise by operation of law shall, upon supplying to the
Company such evidence as the Directors may reasonably require to show his
title to the share, be entitled to the same dividends and other advantages
to which he would be entitled if he were the registered holder of the
share, except that he shall not, before being registered as a Member in
respect of the share, be entitled in respect of it to exercise any right
conferred by membership in relation to meetings of the Company (including
meetings of the holders of any class of shares in the Company): Provided
always that the Directors may at any time give notice requiring any such
person to elect either to be registered himself or to transfer the share,
and, if the notice is not complied with within 60 days, the Directors may
thereafter withhold payment of all dividends, bonuses or other moneys
payable in respect of the share until the requirements of the notice have
been complied with.
UNTRACED SHAREHOLDERS
49. The Company shall be entitled to sell, at the best price reasonably
obtainable at the time of sale, any share of a Member or any share to which
a person is entitled by transmission if and provided that:-
49.1 for a period of 12 years no cheque, warrant or order sent by the Company in
the manner authorised by these Articles in respect of the share in question
has been cashed and no communication has been received by the Company from
the Member or the person entitled by transmission; provided that, in such
period of 12 years, at least three dividends whether
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interim or final on or in respect of the share in question have become
payable and no such dividend during that period has been claimed; and
49.2 the Company has, on or after expiration of the said period of 12 years, by
advertisement in both a national newspaper and a newspaper circulating in
the area in which the last known address of the member or the address at
which service of notices may be effected in the manner authorised in
accordance with the provisions of these Articles is located, given notice
of its intention to sell such share (but so that such advertisements need
not refer to the names of the holder(s) of the share or identify the share
in question); and
49.3 the Company has not, during the further period of three months after the
publication of such advertisements and prior to the exercise of the power
of sale, received any communication from the Member or person entitled by
transmission; and
49.4 if the shares are listed or dealt in on the London Stock Exchange Limited,
the Company has given notice in writing to such Stock Exchange of its
intention to sell such share.
50. If, during any 12 year period or three month period referred to in
paragraphs 49.1 and 49.3 of the preceding Article, further shares have been
issued in respect of those held at the beginning of such 12 year period or
of any previously issued during such periods and all the other requirements
of such Article have been satisfied in respect of the further shares, the
Company may also sell such further shares.
51. To give effect to any sale pursuant to the previous two Articles, the
Directors may authorise any person to execute as transferor an instrument
of transfer of the said share and such instrument of transfer shall be as
effective as if it had been executed by the registered holder of or person
entitled by transmission to such share. The transferee shall not be bound
to see to the application of the purchase moneys and the title of the
transferee shall not be affected by any irregularity or invalidity in the
proceedings relating thereto. The net proceeds of sale shall belong to the
Company which shall be obliged to account to the former Member or other
person previously entitled as aforesaid for an amount equal to such
proceeds and shall enter the name of such former Member or other person in
the books of the Company as a creditor for such amount. No trust shall be
created in respect of the debt, no interest shall be payable in respect of
the same and the Company shall not be required to account for any money
earned on the net proceeds, which may be employed in the business of the
Company or invested in such investments (other than shares of the Company
or its holding company (if any)) as the Directors may from time to time
think fit.
52. If either (i) on two consecutive occasions cheques, warrants or orders in
payment of dividends or other moneys payable in respect of any share have
been sent through the post or otherwise in accordance with the provisions
of these Articles but have been returned undelivered or left uncashed
during the periods for which the same are valid or any transfer by bank or
other funds transfer system has not been satisfied; or (ii) following one
such occasion reasonable enquiries have failed to establish any new address
of the registered holder; the Company need not thereafter despatch further
cheques, warrants or orders and need not thereafter transfer any sum (as
the case may be) in payment of dividends or other
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moneys payable in respect of the share in question until the Member or
other person entitled thereto shall have communicated with the Company and
supplied in writing to the Office an address for the purpose.
ALTERATION OF CAPITAL
53. The Company may from time to time by Ordinary Resolution increase its share
capital by such sum, to be divided into shares of such amount, as the
resolution shall prescribe. All new shares shall be subject to the
provisions of these Articles with reference to allotment, payment of calls,
forfeiture, lien, transfer and transmission and otherwise.
54. The Company may by Ordinary Resolution:-
54.1 consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares;
54.2 sub-divide its existing shares, or any of them, into shares of smaller
amount, provided that:-
(a) in the sub-division the proportion between the amount paid and the
amount, if any, unpaid on each reduced share shall be the same as it
was in the case of the share from which the reduced share is derived;
and
(b) the resolution whereby any share is sub-divided may determine that as
between the resulting shares one or more of such shares may be given
any preference or advantage or be subject to any restriction as
regards dividend, capital, voting or otherwise over the others or any
other of such shares;
54.3 cancel any shares which, at the date of the passing of the resolution, have
not been taken or agreed to be taken by any person, and diminish the amount
of its share capital by the amount of the shares so cancelled.
55. Subject to any direction by the Company in General Meeting, whenever as the
result of any consolidation or division of shares Members of the Company
are entitled to any issued shares of the Company in fractions, the
Directors may deal with such fractions as they shall determine and in
particular may sell the shares to which Members are so entitled in
fractions to any person (including, subject to the provisions of the
Statutes, the Company) and pay and distribute to and amongst the Members
entitled to such shares in due proportions the net proceeds of the sales
thereof. For the purpose of giving effect to any such sale the Directors
may nominate some person to execute a transfer of the shares sold on behalf
of the Members so entitled to, or in accordance with the directions of, the
purchaser thereof and may cause the name of the transferee(s) to be entered
in the Register as the holder(s) of the shares comprised in any such
transfer, and such transferee(s) shall not be bound to see to the
application of the purchase money nor shall such transferee(s) title to the
shares be affected by any irregularity or invalidity in the proceedings in
reference to the sale.
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56. Subject to the provisions of the Statutes, the Company may by Special
Resolution reduce its share capital, any capital redemption reserve and any
share premium account in any way.
GENERAL MEETINGS
57. The Company shall in each year hold a General Meeting as its Annual General
Meeting in addition to any other meetings in that year, and not more than
15 months shall elapse between the date of one Annual General Meeting of
the Company and that of the next. The Annual General Meeting shall be held
at such time and place as the Directors shall appoint.
58. All General Meetings other than Annual General Meetings shall be called
Extraordinary General Meetings.
59. The Directors may, whenever they think fit, convene an Extraordinary
General Meeting, and Extraordinary General Meetings shall also be convened
on such requisition, or, in default, may be convened by such
requisitionists, as provided by the Statutes. If at any time there are not
within the United Kingdom sufficient Directors capable of acting to form a
quorum the Directors in the United Kingdom capable of acting may convene an
Extraordinary General Meeting in the same manner as nearly as possible as
that in which meetings may be convened by the Directors.
NOTICE OF GENERAL MEETINGS
60. An Annual General Meeting and a meeting called for the passing of a Special
Resolution shall be called by not less than 21 clear days' notice in
writing, and a meeting of the Company other than an Annual General Meeting
or a meeting for the passing of a Special Resolution shall be called by not
less than 14 clear days' notice in writing. The notice shall specify the
place, the day and the time of meeting and, in the case of any special
business, the general nature of that business. It shall be given, in the
manner hereinafter mentioned or in such other manner, if any, as may be
prescribed by the Company in General Meeting, to such persons as are, under
these Articles, entitled to receive such notices from the Company and shall
comply with the provisions of the Statutes as to informing Members of their
right to appoint proxies. A notice calling an Annual General Meeting shall
specify the meeting as such and a notice convening a meeting to pass an
Extraordinary Resolution or a Special Resolution as the case may be shall
specify the intention to propose the resolution as such.
61. A meeting of the Company shall, notwithstanding that it is called by
shorter notice than that specified in the last preceding Article, be deemed
to have been duly called if it is so agreed:-
61.1 in the case of a meeting called as the Annual General Meeting, by all the
Members entitled to attend and vote thereat; and
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61.2 in the case of any other meeting, by a majority in number of the Members
having a right to attend and vote at the meeting, being a majority together
holding not less than 95 per cent. in nominal value of the shares giving
that right.
62. The accidental omission to give notice of a meeting, or to send a form of
proxy with a notice where required by these Articles, to any person
entitled to receive notice, or the non-receipt of notice of a meeting or
form of proxy by any such person, shall not invalidate the proceedings at
that meeting.
PROCEEDINGS AT GENERAL MEETINGS
63. All business shall be deemed special that is transacted at an Extraordinary
General Meeting, and also all that is transacted at an Annual General
Meeting, with the exception of declaring a dividend, the consideration of
the annual accounts and the reports of the Directors and Auditors on those
accounts, the appointment of Directors in place of those retiring, and the
appointment of (when special notice of the resolution for such appointment
is not required by the Statutes) and the fixing of the remuneration of the
Auditors or the determination of the manner in which such remuneration is
to be fixed.
64. No business shall be transacted at any General Meeting unless a quorum is
present at the time when the meeting proceeds to business; save as herein
otherwise provided, two Members present in person or by proxy and entitled
to vote shall be a quorum. The appointment of a Chairman in accordance
with the provisions of these Articles shall not be treated as part of the
business of the meeting.
65. If within five minutes (or such longer time as the Chairman may decide)
from the time appointed for the meeting a quorum is not present, the
meeting, if convened by or upon the requisition of Members, shall be
dissolved. In any other case it shall stand adjourned to such time (being
not less than 14 days nor more than 28 days later) and place as the
Chairman shall appoint. If at such adjourned meeting a quorum be not
present within five minutes from the time appointed therefor, the Member or
Members present in person or by proxy and entitled to vote shall have power
to decide upon all matters which could properly have been disposed of at
the meeting from which the adjournment took place. The Company shall give
not less than seven clear days' notice of any meeting adjourned for want of
a quorum, and the notice shall state that the Member or Members present as
aforesaid shall form a quorum and shall have the power aforesaid.
66. The Chairman, if any, of the board of directors shall preside as Chairman
at every General Meeting of the Company. If there be no such Chairman, or
if at any General Meeting he shall not be present within five minutes after
the time appointed for holding the meeting or is unwilling to act as
Chairman, the Directors present shall select one of their number to be
Chairman; or if no Director be present and willing to take the chair the
Members present and entitled to vote shall choose one of their number to be
Chairman of the meeting.
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67. The Chairman may, with the consent of any meeting at which a quorum is
present (and shall if so directed by the meeting), adjourn the meeting from
time to time and from place to place; but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the
meeting from which the adjournment took place. When a meeting is adjourned
for 30 days or more, not less than seven clear days' notice in writing of
the adjourned meeting shall be given specifying the day, the place and the
time of the meeting as in the case of an original meeting, but it shall not
be necessary to specify in such notice the nature of the business to be
transacted at the adjourned meeting. Save as aforesaid it shall not be
necessary to give any notice of an adjournment.
68. If an amendment shall be proposed to any resolution under consideration but
shall in good faith be ruled out of order by the Chairman of the meeting
the proceedings on the substantive resolution shall not be invalidated by
any error in such ruling. In the case of a resolution duly proposed as a
Special or Extraordinary Resolution no amendment thereto (other than an
amendment to correct a patent error) may in any event be considered or
voted upon.
69. At any General Meeting a resolution put to the vote of the meeting shall be
decided on a show of hands unless a poll is (before or on the declaration
of the result of the show of hands) demanded:-
69.1 by the Chairman; or
69.2 by at least three Members present in person or by proxy and entitled to
vote; or
69.3 by any Member or Members present in person or by proxy and representing not
less than one-tenth of the total voting rights of all the Members having
the right to vote at the meeting; or
69.4 by a Member or Members present in person or by proxy holding shares in the
Company conferring a right to vote at the meeting being shares on which an
aggregate sum has been paid up equal to not less than one-tenth of the
total sum paid up on all shares conferring that right.
Unless a poll be so demanded a declaration by the Chairman that a
resolution has on a show of hands been carried or carried unanimously, or
by a particular majority, or lost and an entry to that effect in the book
containing the minutes of the proceedings of the Company shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favour of or against such resolution.
Except as provided in Article 71, if a poll is duly demanded it shall be
taken in such manner (including the use of ballot or voting papers or
tickets) as the Chairman of the meeting directs and he may appoint
scrutineers and fix a time and place for declaring the result of the poll.
The result of the poll shall be deemed to be the resolution of the meeting
at which the poll was demanded.
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70. In the case of an equality of votes, whether on a show of hands or on a
poll, the Chairman of the meeting at which the show of hands takes place or
at which the poll is demanded, shall be entitled to a second or casting
vote.
71. A poll demanded on the election of a Chairman or on the question of an
adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken either immediately or at such subsequent time (not
being more than 30 days after the date of the meeting or adjourned meeting
at which the poll is demanded) and place as the Chairman may direct. No
notice need be given of a poll not taken immediately. Any business other
than that upon which a poll has been demanded may be proceeded with pending
the taking of the poll. The demand for a poll may be withdrawn with the
consent of the Chairman at any time before the close of the meeting or the
taking of the poll, whichever is the earlier, and in that event shall not
invalidate the result of a show of hands declared before the demand was
made.
VOTES OF MEMBERS
72.
72.1 Subject to any rights or restrictions for the time being attached to any
class or classes of shares and to any other provisions of these Articles,
on a show of hands every Member present in person shall have one vote, and
on a poll every Member present in person or by proxy shall have one vote
for each share of which he is the holder.
72.2 For so long as any Regulated Entity is a member, its Ordinary Shares will
not entitle it to exercise more than 5.0% of the total votes exercisable by
Ordinary Shareholders, taking into account each 5.0% limitation described
above. Upon a transfer of any Ordinary Shares held by a Regulated Entity
to a non-Regulated Entity, the foregoing voting restriction shall cease to
apply to such Ordinary Shares.
73. In the case of joint holders of a share, the vote of the senior who tenders
a vote, whether in person or by proxy, shall be accepted to the exclusion
of the votes of the other joint holders; and for this purpose seniority
shall be determined by the order in which the names stand in the Register
in respect of the share.
74. A Member in respect of whom an order has been made by any court having
jurisdiction (in the United Kingdom or elsewhere) in matters concerning
mental disorder may vote, whether on a show of hands or on a poll, by his
receiver curator bonis or other person authorised in that behalf appointed
by that court, and such receiver curator bonis or other person may, on a
poll, vote by proxy, provided that evidence to the satisfaction of the
Directors of the authority of the person claiming to exercise the right to
vote has been delivered at the Office (or at such other place as may be
specified in accordance with these Articles for the delivery of instruments
appointing a proxy) not later than the last time at which an instrument of
proxy should have been delivered in order to be valid for use at that
meeting or on the holding of that poll.
75.1 No Member shall, unless the Directors otherwise determine, be entitled, in
respect of any share in the capital of the Company held by him, to be
present or to vote on any question,
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either in person or by proxy, at any General Meeting, or separate General
Meeting of the holders of any class of shares of the Company, or to be
reckoned in a quorum, if any call or other sum presently payable by him to
the Company in respect of such share remains unpaid.
75.2 If any Member, or any other person appearing to the Directors to be
interested in any shares in the capital of the Company held by such Member,
has been duly served with a notice under section 212 of the Companies Act
1985 and is in default for the period of 14 days from the date of service
of the notice under the said section 212 in supplying to the Company the
information thereby required, then the Company may (at the absolute
discretion of the Directors) at any time thereafter by notice (a
"restriction notice") to such Member direct that, in respect of the shares
in relation to which the default occurred and any other shares held at the
date of the restriction notice by the Member, or such of them as the
Directors may determine from time to time, (the "restricted shares" which
expression shall include any further shares which are issued in respect of
any restricted shares), the Member shall not, nor shall any transferee to
which any of such shares are transferred other than pursuant to a permitted
transfer or pursuant to paragraph 75.3(c) below, be entitled to be present
or to vote on any question, either in person or by proxy, at any General
Meeting of the Company or separate General Meeting of the holders of any
class of shares of the Company, or to be reckoned in a quorum.
75.3 Where the restricted shares represent at least 0.25 per cent. (in nominal
value) of the issued shares of the same class as the restricted shares,
then the restriction notice may also direct that:-
(a) any dividend or any part thereof or other moneys which would otherwise
be payable on or in respect of the restricted shares shall be withheld
by the Company; shall not bear interest against the Company; and shall
be payable (when the restriction notice ceases to have effect) to the
person who would but for the restriction notice have been entitled to
them; and/or
(b) where an offer of the right to elect to receive shares of the Company
instead of cash in respect of any dividend or part thereof is or has
been made by the Company, any election made thereunder by such Member
in respect of such restricted shares shall not be effective; and/or
(c) no transfer of any of the shares held by such Member shall be
recognised or registered by the Directors unless the transfer is a
permitted transfer or:-
(i) the Member is not himself in default as regards supplying the
information required; and
(II) the transfer is of part only of the Member's holding and, when
presented for registration, is accompanied by a certificate by
the Member in a form satisfactory to the Directors to the effect
that after due and careful enquiry
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the Member is satisfied that none of the shares the subject of
the transfer are restricted shares.
Upon the giving of a restriction notice its terms shall apply accordingly.
75.4 The Company shall send a copy of the restriction notice to each other
person appearing to be interested in the shares the subject of such notice,
but the failure or omission by the Company to do so shall not invalidate
such notice.
75.5 Any restriction notice shall have effect in accordance with its terms until
7 days after the Directors are satisfied that the default in respect of
which the restriction notice was issued no longer continues but shall cease
to have effect in relation to any shares which are transferred by such
Member by means of a permitted transfer or in accordance with paragraph
75.3(c) above on receipt by the Company of notice that a transfer as
aforesaid has been made. The Company may (at the absolute discretion of the
Directors) at any time give notice to the Member cancelling, or suspending
for a stated period the operation of, a restriction notice in whole or in
part.
75.6 For the purposes of this Article:-
(a) a person shall be treated as appearing to be interested in any shares
if the Member holding such shares has given to the Company a
notification whether following service of a notice under the said
section 212 or otherwise which either (1) names such person as being
so interested or (2) (after taking into account the said notification
and any other relevant information in the possession of the Company)
the Company knows or has reasonable cause to believe that the person
in question is or may be interested in the shares; and
(b) a transfer of shares is a permitted transfer if but only if:-
(i) it is a transfer by way of, or in pursuance of, acceptance of a
takeover offer for the Company (as defined in section 428 of
the Companies Act 1985); or
(ii) the Directors are satisfied that the transfer is made pursuant
to a bona fide sale of the whole of the beneficial ownership of
the shares to a third party unconnected with the transferring
Member or with any other person appearing to the Directors to
be interested in such shares (and for the purposes of this
paragraph 75.6(b)(ii) any associate (as that term is defined in
section 435 of the Insolvency Act 1986) of the Member or of any
other person appearing to the Directors to be interested in any
of the restricted shares shall be deemed to be connected with
the transferring Member); or
(iii) the transfer results from a sale made on or through the London
Stock Limited or any stock exchange outside the United Kingdom
on which the
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Company's shares of the same class as the restricted shares are
normally dealt in.
75.7 The provisions of this Article are in addition and without prejudice to the
provisions of the Statutes.
76. No objection shall be raised to the qualification of any voter except at
the meeting or adjourned meeting at which the vote objected to is given or
tendered, and every vote not disallowed at such meeting shall be valid for
all purposes. Any such objection made in due time shall be referred to the
Chairman of the meeting, whose decision shall be final and conclusive.
77. On a poll votes may be given personally or by proxy and a Member entitled
to more than one vote need not, if he votes, use all his votes or cast all
the votes he uses in the same way.
78. The instrument appointing a proxy shall be in writing in any usual or
common form, or any other form which the Directors may approve, under the
hand of the appointor or of his attorney duly authorised in writing, or if
the appointor is a corporation, either under seal, or under the hand of an
officer or attorney duly authorised. The signature on such instrument need
not be witnessed.
79. A proxy need not be a Member of the Company. A Member may appoint more than
one proxy to attend on the same occasion. Deposit of an instrument of proxy
shall not preclude a Member from attending and voting in person at the
meeting or any adjournment thereof.
80. An instrument appointing a proxy and (failing previous registration with
the Company) the power of attorney or other authority, if any, under which
it is executed, or a notarially certified copy or a copy certified in
accordance with the Powers of Attorney Act 1971 of that power or authority,
or a copy certified in some other manner approved by the Directors, shall
be deposited at the Office or at such other place or one of such places (if
any) within the United Kingdom as is or are specified for that purpose in
or by way of note to the notice convening the meeting or any document
accompanying such notice, not less than 48 hours before the time for
holding the meeting or adjourned meeting at which the person named in the
instrument proposes to vote, or, in the case of a poll taken otherwise than
at or on the same day as the meeting or adjourned meeting, not less than 24
hours before the time appointed for the taking of the poll at which it is
to be used, and in default the instrument of proxy shall not be treated
as valid.
81. An instrument appointing a proxy shall, unless the contrary is stated
thereon, be valid as well for any adjournment of the meeting to which it
relates. No instrument of proxy shall be valid after the expiration of 12
months from the date of its execution except at an adjourned meeting or on
a poll demanded at a meeting or adjourned meeting in cases where the
meeting was originally held within 12 months from that date.
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82. The instrument appointing a proxy shall be deemed to confer authority to
demand or join in demanding a poll.
83. A vote given or poll demanded in accordance with the terms of an
instrument of proxy or by the duly authorised representative of a
corporation shall be valid notwithstanding the previous death or insanity
of the principal or revocation of the proxy or determination of the
authority of the person voting or demanding a poll, provided that no
intimation in writing of such death, insanity, revocation or
determination shall have been received by the Company at the Office or
such other place (if any) as is specified for depositing the instrument
of proxy before the commencement of the meeting or adjourned meeting or
the holding of a poll subsequently thereto at which such vote is given.
84. Subject to the provisions of the Statutes, a resolution in writing signed
by all the Members for the time being entitled to receive notice of and
to attend and vote at General Meetings (or being corporations by their
duly authorised representatives) shall be as valid and effective as if
the same had been passed at a General Meeting of the Company duly
convened and held, and may consist of two or more documents in like form
each signed by one or more of the Members.
85. Any corporation which is a Member of the Company may by resolution of its
directors or other governing body authorise such person as it thinks fit
to act as its representative at any meeting of the Company or of any
class of Members of the Company, and the person so authorised shall be
entitled to exercise the same powers on behalf of the corporation which
he represents as that corporation could exercise if it were an individual
Member of the Company and such corporation shall for the purposes of
these Articles be deemed to be present in person at any such meeting if a
person so authorised is present thereat.
DIRECTORS
86. Unless and until the Company in General Meeting shall otherwise
determine, the number of Directors shall be not more than 20 nor less
than 2.
87. A Director shall not be required to hold any shares in the capital of the
Company. A Director who is not a Member shall nevertheless be entitled to
receive notice of and attend and speak at all General Meetings of the
Company and all separate General Meetings of the holders of any class of
shares in the capital of the Company.
88. The provisions of section 293 of the Companies Act 1985 (which regulate
the appointment and continuation in office of Directors who have attained
the age of 70) shall apply to the Company.
89. A Director of the Company may be or continue as or become a director or
other officer servant or member of, or otherwise interested in, any body
corporate promoted by the Company or in which the Company may be
interested as shareholder or otherwise, and no such Director shall be
accountable to the Company for any remuneration or other benefits
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received or receivable by him as a director or other officer servant or
member of, or from his interest in, such other body corporate.
90.1 The Directors shall be paid out of the funds of the Company by way of
fees for their services as Directors such sums (if any) as the Directors
may from time to time determine (not exceeding in the aggregate an annual
sum (excluding amounts payable under any other provision of these
Articles) of ?100,000 or such larger amount as the Company may by
Ordinary Resolution determine) and such remuneration shall be divided
between the Directors as they shall agree or, failing agreement, equally.
Such remuneration shall be deemed to accrue from day to day.
90.2 The Directors may also be paid all reasonable travelling, hotel and other
expenses properly incurred by them in attending and returning from
meetings of the Directors or any committee of the Directors or General
Meetings of the Company or of the holders of any class of shares or
debentures of the Company or otherwise in connection with the business of
the Company.
91. Any Director who is appointed to any executive office or who serves on
any committee or who devotes special attention to the business of the
Company, or who otherwise performs services which in the opinion of the
Directors are outside the scope of the ordinary duties of a Director, may
be paid such extra remuneration by way of salary, percentage of profits
or otherwise as the Directors may determine.
92. The Company shall in accordance with the provisions of the Statutes duly
keep a register showing, as respects each Director, interests of his in
shares in, or debentures of, the Company or associated companies.
ALTERNATE DIRECTORS
93.1 Each Director shall have the power at any time to appoint as an alternate
Director either (1) another Director or (2) any other person approved for
that purpose by a resolution of the Directors, and, at any time, to
terminate such appointment. Every appointment and removal of an alternate
Director shall be in writing signed by the appointor and (subject to any
approval required) shall (unless the Directors agree otherwise) only take
effect upon receipt of such written appointment or removal at the Office
or at a meeting of the Directors. An alternate Director shall not be
required to hold any shares in the capital of the Company and shall not
be counted in reckoning the maximum and minimum numbers of Directors
allowed or required by Article 86.
93.2 An alternate Director so appointed shall not be entitled as such to
receive any remuneration from the Company except only such part (if any)
of the remuneration otherwise payable to his appointor as such appointor
may by notice in writing to the Company from time to time direct, but
shall otherwise be subject to the provisions of these Articles with
respect to Directors. An alternate Director shall during his appointment
be an officer of the Company and shall alone be responsible to the
Company for his own acts and defaults and shall not be deemed to be an
agent of his appointor.
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93.3 An Alternate Director shall be entitled (subject to his giving to the
Company an address within the United Kingdom at which notices may be
served upon him) to receive notices of all meetings of the Directors and
of any committee of the Directors of which his appointor is a member, and
shall be entitled to attend and vote as a Director at any such meeting at
which his appointor is not personally present and generally in the
absence of his appointor to perform and exercise all functions, rights,
powers and duties as Director of his appointor.
93.4 The appointment of an alternate Director shall automatically determine on
the happening of any event which, if he were a Director, would cause him
to vacate such office or if his appointor shall cease for any reason to
be a Director otherwise than by retiring and being re-appointed at the
same meeting.
93.5 A Director or any other person may act as alternate Director to represent
more than one Director and an alternate Director shall be entitled at
meetings of the Directors or any committee of the Directors to one vote
for every Director whom he represents in addition to his own vote (if
any) as a Director, but he shall count as only one for the purpose of
determining whether a quorum is present.
BORROWING POWERS
94.1 Subject as hereinafter provided the Directors may exercise all the powers
of the Company to borrow money, and to mortgage or charge its
undertaking, property and assets (present and future) and uncalled
capital, or any part thereof, and, subject to the provisions of the
Statutes to issue debentures, debenture stock, and other securities
whether outright or as security for any debt, liability or obligation of
the Company or of any third party.
94.2 The Directors shall restrict the borrowings of the Company and exercise
all voting and other rights or powers of control exercisable by the
Company in relation to its subsidiary undertakings (if any) so as to
secure (so far, as regards subsidiary undertakings, as by such exercise
they can secure) that the aggregate amount for the time being remaining
outstanding of all moneys borrowed by the Group (which expression in this
Article means the Company and its subsidiary undertakings for the time
being) and for the time being owing to persons outside the Group shall
not at any time, without the previous sanction of an Ordinary Resolution
of the Company in General Meeting, exceed a sum equal to two and a half
times the aggregate of:-
(a) the amount paid up on the issued share capital of the Company; and
(b) the total of the capital and revenue reserves of the Group
(including any share premium account, capital redemption reserve and
credit balance on the profit and loss account) in each case, whether
or not such amounts are available for distribution ;
all as shown in the latest audited consolidated balance sheet of the
Group but after:-
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(i) making such adjustments as may be appropriate in respect of any variation
in such amount paid up on the issued share capital or share premium
account or capital redemption reserve or merger reserve since the date of
such latest audited consolidated balance sheet and so that for this
purpose if any issue or proposed issue of shares for cash or otherwise
has been underwritten or otherwise agreed to be subscribed (for cash or
otherwise) then, at any time when the underwriting of such shares or
other agreement as aforesaid shall be unconditional, such shares shall be
deemed to have been issued and the amount (including any premium) payable
(or which would be credited as payable) in respect thereof (not being
moneys payable later than six months after the date of allotment) shall
be deemed to have been paid up to the extent that the underwriters or
other persons are liable therefor;
(ii) deducting (to the extent included):-
(A) any amounts distributed or proposed to be distributed (but not
provided in such latest audited consolidated balance sheet) other
than distributions attributable to the Company or any subsidiary
undertaking;
(B) any amounts attributable to goodwill (other than goodwill arising on
consolidation);
(C) the aggregate amount of moneys borrowed for the purposes of this
Article 94.2 an amount equal to the aggregate for the time being
outstanding of all cash deposits with banks (not being the Company
or any subsidiary of the Company), certificates of deposit,
securities of governments, and securities of public companies traded
on a Recognised Investment Exchange or an overseas stock exchange
and similar instruments owned by the Company and/or and subsidiary
or subsidiary undertaking of the Company net of a proportion of the
total amount for the time being outstanding of cash deposits and
certificates of deposit and securities of governments, or securities
of public companies traded on a Recognised Investment Exchange or an
overseas stock exchange and similar instruments owned by any partly
owned subsidiary or any subsidiary undertaking which would otherwise
fall to be included, such proportion being that which the issued
equity share capital of such partly owned subsidiary or such
subsidiary undertaking which is not for the time being beneficially
owned directly or indirectly by the Company bears to the whole of
its issued equity share capital; and
(D) moneys borrowed for the purpose of repaying the whole or any part of
any moneys previously borrowed and then outstanding (including any
premium payable on final repayment) and to be applied for that
purpose within 6 months of the borrowing shall not, pending such
application, be taken into account as moneys borrowed;
(iii) excluding:-
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(A) any sums set aside for taxation;
(B) any amounts attributable to outside shareholders in subsidiary
undertakings of the Company;
(iv) deducting any debit balance on the profit and loss account; and
(v) making such adjustments (if any) as the Auditors may consider
appropriate.
94.3 For the purpose of the foregoing limit "moneys borrowed" shall be deemed
to include the following except in so far as otherwise taken into account
(together in each case with any fixed or minimum premium payable on final
redemption or repayment):-
(a) the principal amount for the time being owing (other than to a
member of the Group) in respect of any loan capital, whether secured
or unsecured, issued by a member of the Group in whole or in part
for cash or otherwise;
(b) the principal amount raised by any member of the Group by
acceptances or under any acceptance credit opened on its behalf by
any bank or accepting house other than acceptances relating to the
purchase of goods in the ordinary course of trading and outstanding
for not more than 90 days;
(c) the nominal amount of any issued share capital, and the principal
amount of any moneys borrowed or other indebtedness, the redemption
or repayment of which is guaranteed or secured or is the subject of
an indemnity given by any member of the Group and the beneficial
interest in the redemption or repayment of which is not owned within
the Group; and
(d) the nominal amount of any issued share capital (not being equity
share capital which as regards capital has rights no more favourable
than those attached to its ordinary share capital) of any subsidiary
undertaking of the Company owned otherwise than by other members of
the Group,
but "moneys borrowed" shall not include and shall be deemed not to
include:-
(i) amounts borrowed for the purpose of repaying the whole or any part
(with or without premium) of any moneys borrowed by any member of
the Group then outstanding and so to be applied within six months of
being so borrowed, pending their application for such purpose within
such period; and
(ii) the proportion of the excess outside borrowing of a partly owned
subsidiary undertaking which corresponds to the proportion of its
equity share capital which is not directly or indirectly
attributable to the Company and so that, for this purpose, the
expression "excess outside borrowing" shall mean so much of the
moneys borrowed by such partly owned subsidiary undertaking
otherwise than from
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members of the Group as exceeds the moneys borrowed (if any) from
and owing to it by other members of the Group.
When the aggregate amount of moneys borrowed required to be taken into
account for the purposes of this Article on any particular day is being
ascertained, any of such moneys denominated or repayable (or repayable at
the option of any person other than the Company or any subsidiary
undertaking) in a currency other than sterling shall be translated, for
the purpose of calculating the sterling equivalent, at the rate(s) of
exchange prevailing on that day in London, or on the last business day
six months before such day if thereby such aggregate amount would be less
(and so that for this purpose the rate of exchange prevailing shall be
taken as the spot rate in London quoted at or about 11.00 a.m. on the day
in question by a London clearing bank, approved by the Directors, as
being the rate for the purchase by the Company of the currency and amount
in question for sterling).
94.4 A certificate or report by the Auditors as to the amount of the limit in
paragraph 94.2 of this Article or the aggregate amount of moneys borrowed
falling to be taken into account under paragraph 94.3 of this Article or
to the effect that the limit imposed by this Article has not been or will
not be exceeded at any particular time or times or during any period
shall be conclusive evidence of such amount or fact for the purposes of
this Article.
No lender or other person dealing with the Company or any of its
subsidiary undertakings shall be concerned to see or inquire whether the
said limit is observed, and no debt incurred or security given in excess
of such limit shall be invalid or ineffectual, except in the case of
express notice to the lender or the recipient of the security at the time
when the debt was incurred or security given that the said limit has been
or would thereby be exceeded.
94.5 In this Article "subsidiary undertaking" means a subsidiary undertaking
of the Company which is required by the Statutes to be included in
consolidated group accounts.
94.6 Notwithstanding any other provision of this Article, the Board may at any
time act in reliance on a bona fide estimate of the amount of the
adjusted capital and reserves and if in consequence the limit herein
before contained is inadvertently exceeded, an amount borrowed equal to
the excess may be disregarded until the expiration of 90 days after the
date on which by reason of a determination of the Auditors, the
publication of group accounts or an Interim Report or otherwise the Board
became aware that such a situation has or may have arisen.
POWERS AND DUTIES OF DIRECTORS
95. The business of the Company shall be managed by the Directors, who may
exercise all the powers of the Company subject, nevertheless, to the
provisions of these Articles and of the Statutes, and to such directions
as may be given by the Company in General Meeting by special resolution:
Provided that no alteration of the memorandum of association or these
Articles and no such direction shall invalidate any prior act of the
Directors which would have been valid if such alteration had not been
made or such direction had not been given. The general powers conferred
upon the Directors by this Article shall not be deemed to be
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abridged or restricted by any specific power conferred upon the Directors
by any other Article.
96.1 The Directors may exercise all the powers of the Company to give or award
pensions, annuities, gratuities or other retirement, superannuation,
death or disability allowances or benefits (whether or not similar to the
foregoing) to (or to any person in respect of) any persons who are or
have at any time been Directors of or employed by or in the service of
the Company or of any body corporate which is or was a subsidiary
undertaking or a parent undertaking of the Company or another subsidiary
undertaking of a parent undertaking of the Company or otherwise
associated with the Company or any such body corporate, or a predecessor
in business of the Company or any such body corporate, and to the wives,
widows, children and other relatives and dependants of any such persons
and may establish, maintain, support, subscribe to and contribute to all
kinds of schemes, trusts and funds (whether contributory or non-
contributory) for the benefit of such persons as are hereinbefore
referred to or any of them or any class of them, and so that any Director
or former Director shall be entitled to receive and retain for his own
benefit any such pension, annuity, gratuity, allowance or other benefit
(whether under any such trust, fund or scheme or otherwise).
96.2 Without prejudice to any other provisions of these Articles, the
Directors may exercise all the powers of the Company to purchase and
maintain insurance for or for the benefit of any persons who are or were
at any time Directors, officers, employees or auditors of the Company, or
of any other body (whether or not incorporated) which is or was its
parent undertaking or subsidiary undertaking or another subsidiary
undertaking of any such parent undertaking (together "Group Companies")
or otherwise associated with the Company or any Group Company or in which
the Company or any such Group Company has or had any interest, whether
direct or indirect, or of any predecessor in business of any of the
foregoing, or who are or were at any time trustees of (or directors of
trustees of) any pension, superannuation or similar fund, trust or scheme
or any employees' share scheme or other scheme or arrangement in which
any employees of the Company or of any such other body are interested,
including (without prejudice to the generality of the foregoing)
insurance against any costs, charges, expenses, losses or liabilities
suffered or incurred by such persons in respect of any act or omission in
the actual or purported execution and/or discharge of their duties and/or
the exercise or purported exercise of their powers and discretions and/or
otherwise in relation to or in connection with their duties, powers or
offices in relation to the Company or any such other body, fund, trust,
scheme or arrangement.
97. The Directors may make such arrangements as they think fit for the
management and transaction of the Company's affairs in the United Kingdom
and elsewhere and may from time to time and at any time establish any
local boards or agencies for managing any of the affairs of the Company
in any specified locality, and may appoint any persons to be members of
such local board, or any managers or agents, and may fix their
remuneration. And the Directors from time to time, and at any time, may
delegate to any person so appointed any of the powers, authorities, and
discretions for the time being vested in the Directors (other than the
powers of borrowing and of making calls), with power to
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sub-delegate, and may authorise the members for the time being of any
such local board, or any of them, to fill up any vacancies therein, and
to act notwithstanding vacancies; and any such appointment or delegation
may be made on such terms and subject to such conditions as the Directors
may think fit, and the Directors may at any time remove any person so
appointed, and may annul or vary any such delegation.
98. The Directors may from time to time and at any time by power of attorney
appoint any body corporate, firm or person or body of persons, whether
nominated directly or indirectly by the Directors, to be the attorney or
attorneys of the Company for such purposes and with such powers,
authorities and discretions (not exceeding those vested in or exercisable
by the Directors under these Articles) and for such period and subject to
such conditions as they may think fit, and any such powers of attorney
may contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Directors may think fit and may
also authorise any such attorney to sub-delegate all or any of the
powers, authorities and discretions vested in him.
99. The Company may exercise the powers conferred by the Statutes with regard
to having an official seal for use abroad and the powers conferred by
section 40 of the Companies Act 1985 with regard to having an official
seal for sealing and evidencing securities, and such powers shall be
vested in the Directors.
100. The Company may exercise the powers conferred upon the Company by the
Statutes with regard to the keeping of an overseas branch register, and
the Directors may (subject to the provisions of the Statutes) make and
vary such regulations as they may think fit respecting the keeping of any
such register.
101.1 Subject to the provisions of the Statutes, a Director may hold any other
office or place of profit under the Company, except that of Auditor, in
conjunction with the office of Director and may act by himself or through
his firm in a professional capacity for the Company, and in any such case
on such terms as to remuneration and otherwise as the Directors may
arrange. Any such remuneration shall be in addition to any remuneration
provided for by any other Article. No Director or intending Director
shall be disqualified by his office from entering into any contract,
arrangement, transaction or proposal with the Company either with regard
to his tenure of any such other office or place of profit or any such
acting in a professional capacity or as a vendor, purchaser or otherwise.
Subject to the provisions of the Statutes and save as therein provided no
such contract, arrangement, transaction or proposal entered into by or on
behalf of the Company in which any Director or person connected with him
is in any way interested, whether directly or indirectly, shall be liable
to be avoided, nor shall any Director who enters into any such contract,
arrangement, transaction or proposal or who is so interested be liable to
account to the Company for any profit or other benefit realised by any
such contract, arrangement, transaction or proposal by reason of such
Director holding that office or of the fiduciary relationship thereby
established, but he shall declare the nature of his interest in
accordance with the Statutes.
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101.2 Save as herein provided, a Director shall not vote in respect of any
contract, arrangement, transaction or any other proposal whatsoever in
which he has an interest which (together with any interest of any person
connected with him within the meaning of section 346 of the Companies Act
1985) is to his knowledge a material interest otherwise than by virtue of
interests in shares or debentures or other securities of or otherwise in
or through the Company. A Director shall not be counted in the quorum at
a meeting in relation to any resolution on which he is debarred from
voting.
101.3 A Director shall (in the absence of some other material interest than is
indicated below) be entitled to vote (and be counted in the quorum) in
respect of any resolution concerning any of the following matters,
namely:-
(a) the giving of any guarantee, security or indemnity in respect of
money lent or obligations incurred by him or by any other person at
the request of or for the benefit of the Company or any of its
subsidiary undertakings;
(b) the giving of any guarantee, security or indemnity in respect of a
debt or obligation of the Company or any of its subsidiary
undertakings for which he himself has assumed responsibility in
whole or in part under a guarantee or indemnity or by the giving of
security;
(c) any proposal concerning an offer of shares or debentures or other
securities of or by the Company or any of its subsidiary
undertakings for subscription or purchase in which offer he is or
may be entitled to participate as a holder of securities or in the
underwriting or sub-underwriting of which he is to participate;
(d) any contract, arrangement, transaction or other proposal concerning
any other body corporate in which he or any person connected with
him (within the meaning of section 346 of the Companies Act 1985) is
interested, directly or indirectly and whether as an officer or
shareholder or otherwise howsoever, provided that he and any persons
so connected with him do not to his knowledge hold an interest
(within the meaning of sections 198-211 of the Companies Act 1985)
in one per cent. or more of any class of the equity share capital of
such body corporate or of the voting rights available to members of
the relevant body corporate;
(e) any contract, arrangement, transaction or other proposal concerning
the adoption, modification or operation of a pension, superannuation
or similar fund, trust or scheme or retirement, death or disability
benefit scheme under which he may benefit which has been approved by
the Inland Revenue or which is conditional upon such approval or
which does not accord to him any privilege or advantage not
generally accorded to the employees to whom such scheme, trust or
fund relates;
(f) any contract, arrangement, transaction or other proposal concerning
the adoption, modification or operation of any employees share
scheme (within the meaning of section 743 of the Companies Act 1985)
which has been approved by the Inland Revenue or which is
conditional upon such approval, or which does not accord to
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him any privilege or advantage not generally accorded to the
employees to whom the scheme relates; and
(g) any proposal concerning any insurance which the Company is to
purchase and/or maintain for or for the benefit of any Directors or
for or for the benefit of persons who include Directors.
101.4 A Director shall not vote or be counted in the quorum on any resolution
concerning his own appointment as the holder of any office or place of
profit with the Company or any company in which the Company is interested
including fixing or varying the terms of his appointment or the
termination thereof.
101.5 Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) of two or more
Directors to offices or employments with the Company or any body
corporate in which the Company is interested, such proposals may be
divided and considered in relation to each Director separately and in
such cases each of the Directors concerned (if not debarred from voting
under paragraph 101.3(d) of this Article) shall be entitled to vote (and
be counted in the quorum) in respect of each resolution except that
concerning his own appointment.
101.6 If any question shall arise at any meeting as to the materiality of an
interest or as to the entitlement of any Director to vote and such
question is not resolved by his voluntarily agreeing to abstain from
voting, such question shall be referred to the Chairman of the meeting
and his ruling in relation to any Director other than himself shall be
final and conclusive except in a case where the nature or extent of the
interests of the Director concerned have not been fairly disclosed.
101.7 Subject to the provisions of the Statutes the Company may by Ordinary
Resolution suspend or relax the provisions of this Article to any extent
or ratify any contract, arrangement or transaction not duly authorised by
reason of a contravention of this Article.
102. The Directors may exercise or procure the exercise of the voting rights
conferred by the shares in any other body corporate held or owned by the
Company or any power of appointment in relation to any other body
corporate, and may exercise any voting rights or power of appointment to
which they are entitled as directors of such other body corporate, in
such manner as they shall in their absolute discretion think fit,
including the exercise thereof in favour of appointing themselves or any
of them as directors, officers or servants of such other body corporate,
and fixing their remuneration as such, and may vote as Directors of the
Company in connection with any of the matters aforesaid.
103. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments, and all receipts for moneys paid to the Company,
shall be signed, drawn, accepted, endorsed, or otherwise executed, as the
case may be, in such manner as the Directors shall from time to time
determine.
104. The Directors shall cause minutes to be made in books provided for the
purpose:-
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104.1 of all appointments of officers made by the Directors;
104.2 of the names of the Directors present at each meeting of the Directors
and of any committee of the Directors;
104.3 of all resolutions and proceedings at all meetings of the Company, and of
the Directors, and of committees of Directors.
It shall not be necessary for Directors present at any meeting of
Directors or committee of Directors to sign their names in the Minute
Book or other book kept for recording attendance. Any such minute as
aforesaid, if purporting to be signed by the Chairman of the meeting at
which the proceedings were had, or by the Chairman of the next succeeding
meeting, shall be receivable as prima facie evidence of the matters
stated in such minutes without any further proof.
DISQUALIFICATION OF DIRECTORS
105. The office of a Director shall be vacated in any of the following events,
namely:-
105.1 if he ceases to be a Director by virtue of section 293 of the Companies
Act 1985;
105.2 if a bankruptcy order is made against him or he makes any arrangement or
composition with his creditors generally;
105.3 if he becomes prohibited by law from acting as a Director;
105.4 if, in England or elsewhere, an order is made by any court claiming
jurisdiction in that behalf on the ground (however formulated) of mental
disorder for his detention or for the appointment of a guardian or
receiver or other person to exercise powers with respect to his property
or affairs;
105.5 if he resigns his office by notice in writing under his hand to the
Company or offers in writing under his hand to resign and the Directors
resolve to accept such offer;
105.6 if, not having leave of absence from the Directors, he and his alternate
(if any) fail to attend the meetings of the Directors for six successive
months, unless prevented by illness, unavoidable accident or other cause
which may seem to the Directors to be sufficient, and the Directors
resolve that his office be vacated;
ROTATION OF DIRECTORS
106. At each Annual General Meeting of the Company one-third of the Directors
who are subject to retirement by rotation, or, if their number is not
three or a multiple of three, then the number nearest to but not
exceeding one-third, shall retire from office. A Director retiring at a
meeting shall, if he is not reappointed at such meeting, retain office
until the
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meeting appoints someone in his place, or if it does not do so, until the
dissolution of such meeting.
107. The Directors to retire by rotation in each year shall be those who have
been longest in office since their last appointment or reappointment, but
as between persons who became or were last reappointed Directors on the
same day those to retire shall (unless they otherwise agree among
themselves) be determined by lot. A retiring Director shall be eligible
for reappointment. The Directors to retire on each occasion (both as to
number and identity) shall be determined by the composition of the
Directors at the start of business on the date of the notice convening
the Annual General Meeting and no Director shall be required to retire or
be relieved from retiring by reason of any change in the number or
identity of the Directors after that time on the date of the notice but
before the close of the meeting .
108. If at any General Meeting at which a Director retires by rotation, the
place of any Director retiring by rotation be not filled up, then such
retiring Director shall, if willing, be deemed to have been reappointed,
unless at the meeting it is resolved not to fill the vacancy or unless a
resolution for his reappointment shall have been put to the meeting and
lost.
109. A single resolution for the appointment of two or more persons as
Directors shall not be put at any General Meeting, unless a resolution
that it shall be so put has first been agreed to by the meeting without
any vote being given against it.
110. No person other than a Director retiring at the meeting shall, unless
recommended by the Directors, be eligible for appointment to the office
of Director at any General Meeting unless not less than seven nor more
than 42 days before the date appointed for the meeting there shall have
been left at the Office notice in writing,
111. signed by a Member duly qualified to attend and vote at such meeting, of
his intention to propose such person for appointment, and also notice in
writing signed by that person of his willingness to be appointed. Subject
as aforesaid, the Company may from time to time by Ordinary Resolution
appoint a person who is willing to act to be a Director either to fill a
casual vacancy or as an additional director, and may also determine the
rotation in which any such appointed Directors are to retire.
112. The Directors shall have power at any time, and from time to time, to
appoint any person to be a Director of the Company, either to fill a
casual vacancy or as an addition to the existing Directors, but so that
the total number of Directors shall not at any time exceed the maximum
number, if any, fixed by or pursuant to these Articles. Any Director so
appointed shall hold office only until the next following Annual General
Meeting, and shall then be eligible for reappointment but shall not be
taken into account in determining the Directors who are to retire by
rotation at such meeting. If not reappointed at such meeting, he shall
vacate office at the conclusion thereof.
113. The Company may by Ordinary Resolution, of which special notice has been
given in accordance with the provisions of the Statutes, remove any
Director before the expiration
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of his period of office notwithstanding anything in these Articles or in
any agreement between the Company and such Director. Such removal shall
be without prejudice to any claim such Director may have for damages for
breach of any contract of service between him and the Company.
114. Subject to Article 110, the Company may by Ordinary Resolution appoint
another person in place of a Director removed from office under the
immediately preceding Article. A person appointed in place of a Director
so removed shall be treated (for the purpose of determining the time at
which he or any other Director is to retire by rotation) as if he had
become a Director on the day on which the Director in whose place he is
appointed was last appointed or reappointed a Director.
PROCEEDINGS OF DIRECTORS
115. The Directors may meet for the despatch of business, adjourn and
otherwise regulate their meetings as they think fit. Without prejudice to
the foregoing, all or any of the Directors or of the members of any
committee of the Directors may participate in a meeting of the Directors
or of that committee by means of a conference telephone or any
communication equipment which allows all persons participating in the
meeting to hear each other. A person so participating shall be deemed to
be present in person at the meeting and shall be entitled to vote and be
counted in the quorum accordingly. Such a meeting shall be deemed to take
place where the largest group of those participating is assembled, or, if
there is no such group, where the Chairman of the meeting is then
present. The word "meeting" in these Articles shall be construed
accordingly.
The Directors may determine the quorum necessary for the transaction of
business. Until otherwise determined two Directors shall constitute a
quorum. Questions arising at any meeting shall be decided by a majority
of votes. In case of an equality of votes, the Chairman shall have a
second or casting vote. A Director may, and the Secretary on the
requisition of a Director shall, at any time summon a meeting of the
Directors. Any Director may waive notice of any meeting and any such
waiver may be retrospective.
116. Notice of a meeting of the Directors shall be deemed to be duly given to
a Director if it is given to him personally or by word of mouth or sent
in writing to him at his last known address or any other address given by
him to the Company for this purpose. A Director absent or intending to be
absent from the United Kingdom may request the Directors that notices of
meetings of the Directors shall during his absence be sent in writing to
him at his last known address or any other address given by him to the
Company for this purpose, whether or not out of the United Kingdom.
117. The continuing Directors or sole continuing Director may act
notwithstanding any vacancy in their body, but, if and so long as their
number is reduced below the number fixed by or pursuant to these Articles
as the necessary quorum of Directors, the continuing Directors or
Director may act for the purpose of increasing the number of Directors to
that number, or of summoning a General Meeting of the Company, but for no
other purpose.
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118. The Directors may elect one of their number as a Chairman of their
meetings, and one of their number to be the Deputy Chairman and may at
any time remove either of them from such office; but if no such Chairman
or Deputy Chairman be elected, or if at any meeting neither the Chairman
nor the Deputy Chairman is present within five minutes after the time
appointed for holding the meeting and willing to act, the Directors
present shall choose one of their number to be Chairman of such meeting.
119. The Directors may delegate any of their powers or discretions (including
without prejudice to the generality of the foregoing all powers and
discretions whose exercise involves or may involve any payment to or the
conferring of any other benefit on all or any of the Directors) to
committees consisting of one or more members of their body and (if
thought fit) one or more other persons co-opted as hereinafter provided.
Insofar as any such power or discretion is delegated to a committee any
reference in these Articles to the exercise by the Directors of such
power or discretion shall be read and construed as if it were a reference
to the exercise of such power or discretion by such committee. Any
committee so formed shall in the exercise of the powers and discretions
so delegated conform to any regulations that may from time to time be
imposed by the Directors in default of which the meetings and proceedings
of a committee consisting of more than one member shall be governed
mutatis mutandis by the provisions of these Articles regulating the
proceedings and meetings of the Directors. Any such regulations may
provide for or authorise the co-option to the committee of persons other
than Directors and for such co-opted members to have voting rights as
members of the committee.
120. All acts done by any meeting of the Directors or of a committee of the
Directors or by any person acting as a Director or as a member of a
committee shall, notwithstanding that it be afterwards discovered that
there was some defect in the appointment or continuance in office of any
of the persons acting as aforesaid, or that any of such persons were
disqualified from holding office or not entitled to vote, or had in any
way vacated office, be as valid as if every such person had been duly
appointed or had duly continued in office and was qualified and had
continued to be a Director or member of the committee and was entitled to
vote.
121. A resolution in writing, signed by all the Directors for the time being
entitled to receive notice of a meeting of the Directors or by all the
members of a committee for the time being, shall be as valid and
effective for all purposes as a resolution passed at a meeting duly
convened and held, and may consist of two or more documents in like form
each signed by one or more of the Directors or members of such committee.
Provided that such a resolution need not be signed by an alternate
Director if it is signed by the Director who appointed him.
MANAGING AND EXECUTIVE DIRECTORS
122. Subject to the provisions of the Statutes the Directors may from time to
time appoint one or more of their body to the office of Managing Director
or to hold such other Executive Office in relation to the management of
the business of the Company as they may decide, for such period and on
such terms as they think fit, and, subject to the terms of any service
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contract entered into in any particular case and without prejudice to any
claim for damages such Director may have for breach of any such service
contract, may revoke such appointment. A Director so appointed shall not,
whilst holding such office, be subject to retirement by rotation or be
taken into account in determining the rotation of retirement of Directors
but, without prejudice to any claim for damages such Director may have
for breach of any service contract between him and the Company, his
appointment shall be automatically determined if he ceases from any cause
to be a Director.
123. The salary or remuneration of any Managing Director or such Executive
Director of the Company shall, subject as provided in any contract, be
such as the Directors may from time to time determine, and may either be
a fixed sum of money, or may altogether or in part be governed by the
business done or profits made, and may include the making of provisions
for the payment to him, his widow or other dependants, of a pension on
retirement from the office or employment to which he is appointed and for
the participation in pension and life assurance and other benefits, or
may be upon such other terms as the Directors determine.
124. The Directors may entrust to and confer upon a Managing Director or such
Executive Director any of the powers and discretions exercisable by them
upon such terms and conditions and with such restrictions as they may
think fit, and either collaterally with or to the exclusion of their own
powers and discretions and may from time to time revoke, withdraw, alter
or vary all or any of such powers or discretions.
SECRETARY
125. Subject to the provisions of the Statutes the Secretary shall be
appointed by the Directors for such term, at such remuneration and upon
such conditions as they think fit; and any Secretary may be removed by
them.
THE SEAL
126.1. The Directors shall provide for the safe custody of the Seal and any
official seal kept under section 40 of the Companies Act 1985, and
neither shall be used without the authority of the Directors or of a
committee of the Directors authorised by the Directors in that behalf.
Every instrument to which either shall be affixed shall be signed
autographically by one Director and the Secretary or by two Directors,
save that as regards any certificates for shares or debentures or other
securities of the Company the Directors may by resolution determine that
such signatures or either of them shall be dispensed with or affixed by
some method or system of mechanical signature.
126.2. Where the Statutes so permit, any instrument signed by one Director and
the Secretary or by two Directors and expressed to be executed by the
Company shall have the same effect as if executed under the Seal,
provided that no instrument shall be so signed which makes it clear on
its face that it is intended by the person or persons making it to be a
deed without the authority of the Directors or of a committee authorised
by the Directors in that behalf.
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RESERVE
127. The Directors may from time to time set aside out of the profits of the
Company such sums as they think proper as a reserve or reserves which
shall, at the discretion of the Directors, be applicable for any purpose
to which the profits of the Company may be properly applied, and pending
such application may, at the like discretion, either be employed in the
business of the Company or be invested in such investments as the
Directors think fit. The Directors may divide the reserve into such
special funds as they think fit, and may consolidate into one fund any
special funds or any parts of any special funds into which the reserve
may have been divided as they think fit. The Directors may also without
placing the same to reserve carry forward any profits which they may
think prudent not to divide.
DIVIDENDS
128. The Company in General Meeting may declare dividends, but no dividend
shall exceed the amount recommended by the Directors.
129. Subject to the provisions of the Statutes, the Directors:-
129.1 may from time to time pay such interim dividends as they think fit;
129.2 may also pay the fixed dividends payable on any shares of the Company
half-yearly or otherwise on fixed dates.
If the Directors act in good faith, they shall not incur any liability to
the holders of shares conferring preferred rights for any loss they may
suffer in consequence of the payment of an interim dividend on any shares
having non-preferred or deferred rights.
130. No dividend or interim dividend shall be paid otherwise than in
accordance with the provisions of the Statutes.
131. Subject to the rights of persons, if any, entitled to shares with any
priority, preference or special rights as to dividend, all dividends
shall be declared and paid according to the amounts paid up on the shares
in respect whereof the dividend is paid, but no amount paid up on a share
in advance of calls shall be treated for the purpose of this Article as
paid up on the share. All dividends shall be apportioned and paid
proportionately to the amounts paid up on the shares during any portion
or portions of the period in respect of which the dividend is paid; but
if any share is issued on terms providing that it shall rank for dividend
as if paid up in full or in part from a particular date, whether past or
future, such share shall rank for dividend accordingly.
132.1 The Directors may deduct from any dividend or other moneys payable to any
Member on or in respect of a share all sums of money (if any) presently
payable by him to the Company on account of calls or otherwise in
relation to shares of the Company.
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132.2 The waiver in whole or in part of any dividend on any share by any
document (whether or not under seal) shall be effective only if such
document is signed by the shareholder (or the person entitled to the
share in consequence of the death or bankruptcy of the holder or
otherwise by operation of law) and delivered to the Company and if or to
the extent that the same is accepted as such or acted upon by the
Company.
133. Any General Meeting declaring a dividend may, upon the recommendation of
the Directors, direct payment of such dividend wholly or in part by the
distribution of specific assets and in particular of paid up shares or
debentures of any other body corporate, and the Directors shall give
effect to such direction. Where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient,
and in particular may issue fractional certificates and fix the value for
distribution of such specific assets or any part thereof and may
determine that cash payments shall be made to any Members upon the
footing of the value so fixed in order to adjust the rights of all
parties, and may vest any such specific assets in trustees as may seem
expedient to the Directors.
134. All dividends and other distributions shall be paid (subject to any lien
of the Company) to those Members whose names shall be on the Register at
the date at which such dividend shall be declared or at such other date
as the Company by Resolution or the Directors may determine.
The Company may pay any dividend or other moneys payable in cash in
respect of shares by direct debit, bank or other funds transfer system,
or by cheque, dividend warrant or money order and may remit the same by
post directed to the registered address of the holder or person entitled
thereto (or, in the case of joint holders or of two or more persons
entitled thereto, to the registered address of the person whose name
stands first in the Register), or to such person and to such address as
the holder or joint holders or person or persons may in writing direct,
and the Company shall not be responsible for any loss of any such cheque,
warrant or order nor for any loss in the course of any such transfer or
where it has acted on any such directions. Every such cheque, warrant or
order shall be made payable to, or to the order of, the person to whom it
is sent, or to, or to the order of, such person as the holder or joint
holders or person or persons entitled may in writing direct, and the
payment of such cheque, warrant or order shall be a good discharge to the
Company. Any one of two or more joint holders of any share, or any one of
two or more persons entitled jointly to a share in consequence of the
death or bankruptcy of the holder or otherwise by operation of law, may
give effectual receipts for any dividends or other moneys payable or
property distributable on or in respect of the share.
135. Subject to the rights attaching to, or the terms of issue of, any shares,
no dividend or other moneys payable on or in respect of a share shall
bear interest against the Company.
136. All dividends or other sums payable on or in respect of any share which
remain unclaimed may be invested or otherwise made use of by the
Directors for the benefit of the Company until claimed. All dividends
unclaimed for a period of 12 years or more after becoming due for payment
shall be forfeited and shall revert to the Company. The payment of any
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unclaimed dividend or other sum payable by the Company on or in respect
of any share into a separate account shall not constitute the Company a
trustee thereof.
CAPITALISATION OF PROFITS AND SCRIP DIVIDENDS
137. Subject to the provisins of Article 138, the Directors may capitalise any
part of the amount for the time being standing to the credit of any of
the Company's reserve accounts (including any share premium account and
capital redemption reserve) or to the credit of the profit and loss
account (in each case, whether or not such amounts are available for
distribution), and appropriate the sum resolved to be capitalised
either:-
137.1 to the holders of Ordinary Shares (on the Register at the close of
business on such date as may be specified in, or determined as provided
in, the resolution of the General Meeting granting authority for such
capitalisation) who would have been entitled thereto if distributed by
way of dividend and in the same proportions; and the Directors shall
apply such sum on their behalf either in or towards paying up any
amounts, if any, for the time being unpaid on any shares held by such
holders of Ordinary Shares respectively or in paying up in full at par
unissued shares or debentures of the Company to be allotted credited as
fully paid up to such holders of Ordinary Shares in the proportions
aforesaid, or partly in the one way and partly in the other; or to such
holders of Ordinary Shares who may, in relation to any dividend or
dividends, validly accept an offer or offers on such terms and conditions
as the Directors may determine (and subject to such exclusions or other
arrangements as the Directors may consider necessary or expedient to deal
with legal or practical problems in respect of overseas shareholders or
in respect of shares represented by depositary receipts) to receive new
Ordinary Shares, credited as fully paid up, in lieu of the whole or any
part of any such dividend or dividends (any such offer being called a
"Scrip Dividend Offer"); and the Directors shall apply such sum on their
behalf in paying up in full at par unissued shares (in accordance with
the terms, conditions and exclusions or other arrangements of the Scrip
Dividend Offer) to be allotted credited as fully paid up to such holders
respectively.
138.1 The authority of the Company in General Meeting shall be required before
the Directors implement any Scrip Dividend Offer (which authority may
extend to one or more offers).
138.2 The authority of the Company in General Meeting shall be required for any
capitalisation pursuant to paragraph 137.1 above.
138.3 A share premium account and a capital redemption reserve and any other
amounts which are not available for distribution may only be applied in
the paying up of unissued shares to be allotted to holders of Ordinary
Shares of the Company credited as fully paid up.
139 Whenever a capitalisation requires to be effected, the Directors may do
all acts and things which they may consider necessary or expedient to
give effect thereto, with full power to the Directors to make such
provision as they think fit for the case of shares or debentures becoming
distributable in fractions (including provisions whereby fractional
entitlements
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are disregarded or the benefit thereof accrues to the Company rather than
to the Members concerned) and also to authorise any person to enter on
behalf of all Members concerned into an agreement with the Company
providing for any such capitalisation and matters incidental thereto and
any agreement made under such authority shall be effective and binding on
all concerned.
ACCOUNTS
140. The Directors shall cause accounting records to be kept in accordance
with the provisions of the Statutes.
141. The accounting records shall be kept at the Office or, subject to the
provisions of the Statutes, at such other place or places as the
Directors think fit, and shall always be open to the inspection of the
officers of the Company.
142. The Directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or
regulations the accounting records of the Company or any of them shall be
open to the inspection of Members not being Directors, and no Member (not
being a Director) shall have any right of inspecting any account or book
or document of the Company except as conferred by statute or authorised
by the Directors or by the Company in General Meeting.
143. The Directors shall from time to time, in accordance with the provisions
of the Statutes, cause to be prepared and to be laid before the Company
in General Meeting copies of the Company's annual accounts, the
Directors' report and the Auditors' report on those accounts.
144. A copy of the Company's annual accounts, together with a copy of the
Auditors' report and Directors' report, which is to be laid before the
Company in General Meeting, shall not less than 21 days before the date
of the meeting be sent to every Member (whether or not he is entitled to
receive notices of General Meetings of the Company) and every holder of
debentures of the Company (whether or not he is so entitled) and to every
other person who is entitled to receive notices of meetings from the
Company under the provisions of the Statutes or these Articles. Provided
that this Article shall not require a copy of these documents to be sent
to any Member or holder of debentures to whom a summary financial
statement is sent in accordance with the Statutes and provided further
that this Article shall not require a copy of these documents to be sent
to any person of whose address the Company is not aware or to more than
one of the joint holders of any shares or debentures.
AUDIT
145. Auditors shall be appointed and their duties regulated in accordance with
the provisions of the Statutes.
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NOTICES
146.1 A notice or other document (including a share certificate) may be given
by the Company to any Member either personally or by sending it by post
addressed to him at his registered address, or (if he has no registered
address within the United Kingdom) to the address, if any, within the
United Kingdom supplied by him to the Company for the giving of notice to
him.
146.2 If at any time by reason of the suspension or any curtailment of postal
services in the United Kingdom the Company is unable in the opinion of
the Directors effectively to convene a General Meeting by notices sent
through the post, a General Meeting may be convened by a notice
advertised in at least one national newspaper and such notice shall be
deemed to have been duly served on all Members and other persons entitled
thereto at noon on the day when the advertisement has appeared. In any
such case the Company shall send confirmatory copies of the notice by
post if at least seven days prior to the date of the Meeting the posting
of notices to addresses throughout the United Kingdom again becomes in
the opinion of the Directors practicable.
147. A Member who has no registered address within the United Kingdom, and has
not supplied an address within the United Kingdom as aforesaid, shall not
be entitled to receive any notice from the Company.
148. Where a notice or other document is sent by post, service of the notice
or other document shall be deemed to be effected by properly addressing,
prepaying, and posting a letter containing the notice or other document,
and to have been effected at the latest within 24 hours if prepaid as
first-class and within 72 hours if prepaid as second-class after the
letter containing the same is posted; and in proving such service it
shall be sufficient to prove that the letter containing the same was
properly addressed and stamped and put in the post.
149. A notice or other document may be given by the Company to the joint
holders of a share by giving the notice or other document to the joint
holder first named in the Register in respect of the share.
150. A notice or other document may be given by the Company to the persons
entitled to a share in consequence of the death or bankruptcy of a Member
or otherwise by operation of law by sending it through the post in a
prepaid letter addressed to them by name, or by the title of
representatives of the deceased, or trustee of the bankrupt, or by any
like description, at the address, if any, within the United Kingdom
supplied for the purpose by the persons claiming to be so entitled, or
(until such an address has been so supplied) by giving the notice or
other document in any manner in which the same might have been given if
the death or bankruptcy or other event had not occurred.
151. Subject to such restrictions affecting the right to receive notice as are
for the time being applicable to the holders of any class of shares,
notice of every General Meeting shall be given in any manner hereinbefore
authorised to:-
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151.1 every Member except those Members who (having no registered address
within the United Kingdom) have not supplied to the Company an address
within the United Kingdom for the giving of notices to them;
151.2 the Auditors.
No other person shall be entitled to receive notices of General Meetings.
PROVISION FOR EMPLOYEES
152. The power conferred upon the Company by section 719 of the Companies Act
1985 to make provision for the benefit of persons employed or formerly
employed by the Company or any of its subsidiaries, in connection with
the cessation or the transfer to any person of the whole or part of the
undertaking of the Company or any subsidiary shall only be exercised by
the Company with the prior sanction of a Special Resolution. If at any
time the capital of the Company is divided into different classes of
shares, the exercise of such power as aforesaid shall be deemed to be a
variation of the rights attached to each class of shares in issue and
shall accordingly require either (i) the prior consent in writing of the
holders of three-fourths of the issued shares or (ii) the prior sanction
of an Extraordinary Resolution passed at a separate General Meeting of
the holders of the shares, of each class, in accordance with the
provisions of Article 16 hereof.
WINDING UP
153. If the Company shall be wound up the Liquidator may, with the sanction of
an Extraordinary Resolution of the Company and any other sanction
required by the Statutes, divide amongst the Members in specie or kind
the whole or any part of the assets of the Company (whether they shall
consist of property of the same kind or not) and may, for such purpose,
set such value as he deems fair upon any property to be divided as
aforesaid and may determine how such division shall be carried out as
between the Members or different classes of Members. The Liquidator may,
with the like sanction, vest the whole or any part of such assets in
trustees upon such trusts for the benefit of the contributories as the
Liquidator, with the like sanction, shall think fit, but so that no
Member shall be compelled to accept any shares or other securities or
other assets whereon there is any liability.
INDEMNITY
154. Subject to the provisions of the Statutes but without prejudice to any
indemnity to which the person concerned may otherwise be entitled, every
person who is or was at any time a Director or other officer or Auditor
of the Company shall be indemnified out of the assets of the Company
against all costs, charges, expenses, losses or liabilities which he may
sustain or incur in or about the actual or purported execution and/or
discharge of the duties of his office and/or the exercise or purported
exercise of his powers or discretions and/or otherwise in relation
thereto or in connection therewith, including (without prejudice to the
generality of the foregoing) any liability incurred by him in defending
any proceedings,
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whether civil or criminal, in which judgment is given in his favour or in
which he is acquitted or in connection with any application under section
144(3) or (4) or section 727 of the Companies Act 1985, in which relief
is granted to him by the Court.
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EXHIBIT 5.1
[LETTERHEAD FOR ASHURST MORRIS CRISP APPEARS HERE]
4 April 1997
TO: Alliance Resources Plc
Kingsbury House
15-17 King Street
London SW1Y 6QU
Dear Sirs,
We have acted as legal advisers in England to Alliance Resources PLC (the
"Company") in connection with the proposed issue by the Company:
(a) of up to 21,448,787 ordinary shares of 40p each ("New Ordinary Shares") in
the capital of the Company (the "LaTex Consideration Shares") and up to
1,927,908 warrants to subscribe for Ordinary Shares (the "LaTex
Consideration Warrants") pursuant to an Agreement and Plan of Merger dated
12th August 1996, as amended through 12 March 1997, providing for the
merger (the "Merger") of Alliance Resources (Delaware) Inc. a newly formed
wholly owned subsidiary of the Company into LaTex Resources, Inc. a
Delaware corporation (the "Plan of Merger"):
(b) of (i) 1,343,750 New Ordinary Shares (the "ORRI Consideration Shares", and
together with the LaTex Consideration Shares, the "Consideration Shares"),
(ii) 1,210,938 Warrants to subscribe for New Ordinary Shares (the "ORRI
Consideration Warrants", and together with the LaTex Consideration
Warrants, the "Consideration Warrants") and (iii) loan notes convertible
into 1,078,125 New Ordinary Shares (the "Loan Notes") pursuant to an
assignment agreement to be entered into between, inter alia, the Company
and LaSalle Street Natural Resources Corporation (the "Bank") (the
"Assignment"); and
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(c) of 156,250 New Ordinary Shares to be issued to the Bank or an affiliate of
the Bank in settlement of a financing fee.
We have been provided with the following documents:
(a) a draft circular (Draft 16:4.4.97) addressed to the holders of ordinary
shares on the Company's register of shareholders setting out details of the
Merger, the Consideration Shares, the Consideration warrants and the Loan
Notes and comprising listing particulars required by the London Stock
Exchange in accordance with the listing rules made under Section 142 of the
Financial Services Act 1986 (the "Circular");
(b) the US registration statement on Form F-4 (Registration No. 333-19013)
under the US Securities Act of 1933 as amended (the "Registration
Statement") as filed with the Securities and Exchange Commission ("SEC") on
14 March 1997 and updated to 1st April 1997;
(c) a draft dated 26 March 1997 of the Assignment;
(d) a copy of the Plan of Merger;
(e) a draft report dated __ _______ 1997 prepared by KPMG pursuant to s.108 of
the United Kingdom Companies Act 1985 in relation to the ORRI Consideration
Shares and the Loan Notes (the "KPMG Report");
(f) a certified copy of the resolutions of the Board of Directors (and/or a
duly constituted and authorised committee thereof) of the Company relating
(inter alia) to the creation and issue of the New Shares and the
Consideration Warrants and the issue of the Circular (the "Completion Board
Resolutions");
(g) a certified copy of the resolution of the Board of Directors (and/or duly
constituted and authorised committee thereof) of the Company relating
(inter alia) to the approval of the Plan of Merger and the issue of the
Registration Statement (the "Board Resolutions");
(h) drafts dated 4 April 1997 of the instrument and the agreement constituting
the Consideration Warrants proposed to be executed by the Company (the
"Warrant Instruments");
(i) a draft dated 4 April 1997 of the instrument constituting the Loan Notes
proposed to be executed by the Company (the "Loan Note Instrument"); and
(j) a certified copy of the Memorandum of Association and Articles of
Association of the Company.
We have today carried out a company search at the Companies Registry, in respect
of the Company, which did not reveal the existence of any order or resolution to
wind up the Company or of the appointment of any receiver or administrator.
Notice of an order,
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resolution or appointment does not appear immediately on the microfiche and a
company search will not in any event reveal the existence of a petition to wind
up or appoint an administrator.
Except as stated above, we have not examined any contracts, instruments or other
documents entered into by, or affecting, the Company or any corporate records of
the company and have not made any other enquiries concerning the Company or
carried out any due diligence exercise. It is not customary for solicitors in
the United Kingdom to examine any such contracts, instruments or other documents
or any corporate records other than those described above in order to give the
opinion stated below.
In giving this opinion, we have assumed:
(i) the Registration Statements as amended, and filed by the Company with
the SEC is effective under US law;
(ii) the genuineness of all signatures;
(iii) the authenticity and completeness of all documents submitted to us as
originals;
(iv) that the Board Resolutions and the Completion Board Resolutions were
duly passed at a properly convened meeting of duly appointed directors
(or committee) of the Company and that a duly qualified quorum of such
directors (or committee) present throughout the meeting voted in favour
of approving the resolutions, that any provisions contained in the
Companies Act 1985 or the Company's articles of Association relating to
the declaration of directors' interests or the power of interested
directors to vote were duly observed and that such resolutions have not
been amended or rescinded and are in full force and effect;
(v) the conformity to original documents of all documents submitted to us as
copies and the authenticity and completeness of such original documents;
(vi) that any certificates and other documents dated the date hereof or dated
earlier than the date and on which we have expressed reliance remain
accurate and that no additional matters would have been disclosed by
company searches at the Companies Registry being carried out since the
carrying out of the search referred to above;
(vii) that the Company has not passed a voluntary winding-up resolution and
that no petition has been presented to or order made by the court for
the winding-up of the Company or the appointment of an administrator of
the Company and that no receiver has been appointed in respect of the
Company or any of its respective assets which in any such case has not
been revealed by the company search referred to above;
(viii) that there have been no amendments to the Company's Memorandum or
Articles of Association as compared to the form certified as at 18 March
1997 as being in force and provided to us in connection with the giving
of this opinion;
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(ix) that a notice under paragraph 7.1 of the London Stock Exchange Listing
Rules will be posted in relation to the new Ordinary Shares;
(x) that the financing fee payable to the Bank constitutes a liquidated sum
payable by the Company to the Bank;
(xi) that the Warrant Instruments and the Loan Note Instrument will be duly
executed, in the form produced to us, on or prior to completion of the
Merger;
(xii) that the KPMG Report will be duly issued to the Bank and the Company
prior to completion of the Merger;
(xiii) that no material amendments will be made to the Circular from the draft
provided to us and that all of the resolutions set out in the Circular
will be duly passed unamended;
(xiv) that the Assignment is entered into and completed in accordance with its
terms and conditions on or prior to completion of the Merger without
waiver or variation of any such terms and conditions; and
(xv) that the Merger is completed in accordance with the terms and conditions
of the Plan of Merger without waiver or variation of any such terms and
conditions.
We have not investigated the laws of any country other than England and we
assume that no foreign law affects any of the conclusions stated below.
Accordingly, this opinion is given only with respect to, and is itself governed
by, English law. We have not investigated whether the Company is or will by
reason of the matters contemplated by the Plan of Merger be in breach of any of
its obligations under any agreement, document, deed or instrument except such
documents as stated herein.
Based upon the foregoing and subject to any matters not disclosed to us, and
subject to the qualifications set out below we are at the opinion that:
(A) the Company is a public limited company, duly incorporated and
subsisting under the laws of England and Wales;
(B) the LaTex Consideration Shares and the ORRI Consideration Shares will,
upon completion of the Plan of Merger and the Assignment and when issued
in accordance with the Circular;
(i) be duly and validly authorised; and
(ii) be validly issued, fully paid and not subject to calls for
additional payments of any kind.
(C) the LaTex Consideration Warrants and the ORRI Consideration Warrants
will, upon completion of the Plan of Merger and the Assignment and when
constituted in
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accordance with the Warrant Instruments and issued in accordance with
the Circular;
(i) be duly and validly authorised; and
(ii) be validly issued, fully paid and (subject to the terms of
exercise of the relevant Consideration Warrants) not subject to
calls for additional payments of any kind;
(D) the Loan Notes will, upon completion of the Plan of Merger and the
Assignment and when issued in accordance with the Circular;
(i) be duly and validly authorised; and
(ii) be validly issued, partly paid and subject only to such calls for
additional payments as are referred to in the Circular; and
(E) the Ordinary Shares arising on exercise of the LaTex Consideration
Warrants and the ORRI Consideration Warrants and on conversion of the
Loan Notes in accordance with their terms will, when issued:
(i) be duly and validly authorised; and
(ii) be validly issued, fully paid, and not subject to calls for any
additional payment of any kind; and
(F) the statements in the Registration Statement under the caption
"Taxation", insofar as they constitute summaries of the laws of the
United Kingdom and of current Inland Revenue Practice, are accurate and
complete in all material respects as of the date of this letter.
This opinion is subject to the following qualifications:
(a) an English company has authority only to carry on those businesses
specified in the objects clause of its Memorandum of Association;
(b) we have not been involved in the drafting, preparation or negotiation of
the Registration Statement and accordingly express no opinion as to the
sufficiency or effectiveness of it to achieve the purposes contemplated
by the parties thereto;
(c) we have not obtained any further information as to whether there are any
breach of warranties or covenants and in particular have not analysed
whether the issue of the shares, the entering into of the Plan of Merger
or the completion thereof, would breach any financial covenants of the
Company; and
(d) we have conducted no due diligence in respect of the Registration
Statement, and accordingly accept no liability save in relation to the
limited issues addressed in this opinion.
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We confirm that enforcement of judgments obtained outside the United Kingdom is
subject to detailed rules deriving in part from treaty, in part from statute
and in part from English common law. In particular, enforcement may not be
permitted if a judgment was obtained by fraud, was contrary to public policy of
English law, relates to foreign penal or revenue laws, is contrary to natural
justice, amounts to judgment on a matter previously determined by an English
court, is given in proceedings brought in breach of an agreement for settlement
of disputes or if enforcement of the judgment is restricted by the provisions of
the Protection of Trading Interests Act 1980 (which primarily relates to
multiple damages awards).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not admit that we come within the category of
persons whose consent is required by Section 7 of the US Securities Act of 1933,
as amended, or the rules and regulations of the Securities Exchange Commission
thereunder.
This opinion is governed by English law.
Yours faithfully,
/s/ ASHURST MORRIS CRISP
Ashurst Morris Crisp
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EXHIBIT 10.4
U.S. $21,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 14, 1997,
among
LATEX PETROLEUM CORPORATION,
LATEX/GOC ACQUISITION, INC.,
GERMANY OIL COMPANY,
(formerly known as LRI ACQUISITION, INC.),
ALLIANCE RESOURCES (USA) INC.
and SOURCE PETROLEUM INC.
as the Borrowers,
and
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as the Lender.
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 14,
1997, among LATEX PETROLEUM CORPORATION, an Oklahoma corporation ("LPC"),
LATEX/GOC ACQUISITION, INC., a Delaware corporation ("GOCA"), GERMANY OIL
COMPANY, a Delaware corporation, formerly known as LRI Acquisition, Inc. ("New
GOC," and together with LPC and GOCA, the "Original Borrowers"), Alliance
Resources (USA) Inc., a Delaware corporation ("Alliance USA"), Source Petroleum
Inc., a Louisiana corporation ("Source") (the Original Borrowers, Alliance USA
and Source, collectively, the "Borrowers" and individually, a "Borrower") and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association (the "Lender"),
W I T N E S S E T H:
WHEREAS, the Borrowers are engaged in the business of oil and gas
exploration and production, and activities related or ancillary thereto; and
WHEREAS, the Original Borrowers and the Lender are parties to that certain
Amended and Restated Credit Agreement dated as of October 20, 1995 (the "Prior
Agreement") pursuant to which the Lender made Commitments to make Loans to the
Original Borrowers from time to time prior to the applicable Commitment
Termination Date in maximum aggregate principal amount of Loans at any one time
not to exceed in the aggregate the lesser of (x) the Collateral Value, or (y)
$30,400,000; and
WHEREAS, the Original Borrowers and the Lender are also parties to that
certain Amendment No. 1 to Amended and Restated Credit Agreement dated as of
December 29, 1995 and that certain Amendment No. 2 to Amended and Restated
Credit Agreement dated as of August 16, 1996, pursuant to which the Prior
Agreement was amended (the Prior Agreement, as so amended, herein called the
"Existing Agreement"), and
WHEREAS, each Original Borrower, LRI, Enpro and the Lender are parties to
that certain Forbearance Agreement, dated as of July 23, 1996, and amended by
that certain First Amendment to Forbearance Agreement dated as of October 15,
1996, that certain Second Amendment to Forbearance Agreement dated as of
November 29, 1996 and that certain Third Amendment to Forbearance Agreement
dated as of February 28, 1997 (as amended, the "Forbearance Agreement"); and
WHEREAS, LRI has entered into the Merger Agreement pursuant to which LRI
will become a wholly-owned subsidiary of Alliance Plc; and
<PAGE>
WHEREAS, the parties hereto have executed this Agreement to evidence the
fact that, although the effectiveness of this Agreement is contingent upon the
consummation of the Merger and the satisfaction of the conditions precedent set
forth herein, this Agreement sets forth the terms and conditions acceptable to
the parties hereto; and
WHEREAS, this Agreement shall be effective upon its execution by all the
parties hereto, provided, however, such effectiveness is contingent upon the
consummation of the Merger and the satisfaction of all other conditions
precedent set forth in Article VI.
WHEREAS, pursuant to the Commitments in the Existing Agreement, the Lender
made Loans to the Original Borrowers; and
WHEREAS, the proceeds of such Loans have been and will be used
(a) to repay, refinance or acquire certain existing indebtedness;
(b) for working capital and general business purposes; and
(c) to finance certain Approved Development Activities on the Oil and
Gas Properties owned by the Borrowers; and
WHEREAS, the Borrowers have requested that the Lender make certain
amendments to the Existing Agreement and to make additional loans to the
Borrowers; and
WHEREAS, the Lender is willing, on the terms and subject to the conditions
hereinafter set forth (including Article VI), to make such amendments to the
Existing Agreement, and to make such loans to the Borrowers; and
WHEREAS, the parties have agreed that it is in their respective best
interests to enter into this Agreement, amending, restating and superseding the
Existing Agreement,
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall,
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except where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Alliance Group" means Alliance Resources Group, Inc., a Delaware
corporation, a wholly-owned Subsidiary of Alliance Plc and the sole shareholder
of each of the Alliance US Subsidiaries.
"Alliance Newco" means Alliance Resources (Delaware), Inc., a Delaware
corporation, and wholly-owned Subsidiary of Alliance Plc. Pursuant to the
Merger Agreement, Alliance Newco shall merge with and into LRI.
"Alliance Plc" means Alliance Resources Plc, a public limited company
incorporated in England and Wales, and the sole shareholder of Alliance Group,
Manx and, after the Merger, LRI.
"Alliance USA" is defined in the preamble.
"Alliance US Subsidiaries" means Alliance USA, Source, ARCOL and ARNO, each
a Subsidiary of Alliance Group.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agreement" means, on any date, this Second Amended and Restated Credit
Agreement as originally in effect on the Effective Date and as thereafter from
time to time amended, supplemented, amended and restated, or otherwise modified
and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest as announced from time to time by the Lender
as its "reference rate" at its Domestic Office; or
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(b) the Federal Funds Rate most recently determined by the Lender plus
1/4%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest in connection with extensions of credit. Changes in the rate of
interest on that portion of any Loans maintained as Base Rate Loans will take
effect simultaneously with each change in the Alternate Base Rate. The Lender
will give notice to the Borrowers of changes in the Alternate Base Rate.
"Applicable Law" means with respect to any Person or matter, any federal,
state, regional, tribal or local statute, law, code, rule, treaty, convention,
application, order, decree, consent decree, injunction, directive, determination
or other requirement (whether or not having the force of law) relating to such
Person or matter and, where applicable, any interpretation thereof by an
Governmental Agency having jurisdiction with respect thereto or charged with the
administration or interpretation thereof.
"Applicable Margin" means, (a) with respect to any LIBO Rate Loan at any
time of determination, a margin above the interest rate or fee applicable to
such Loan equal to two percent (2%), and (b) with respect to any Base Rate Loan
at any time of determination, a margin above the interest rate or fee applicable
to such Loan equal to one percent (1%).
"Approvals" means each and every approval, authorization, license, permit,
consent, variance, land use entitlement, franchise, agreement, filing or
registration by or with any Government Agency or other Person necessary for all
stages of developing, operating, maintaining and abandoning Oil and Gas
Properties.
"Approved CapEx Projects" means, for any period, (i) the sum of all Capital
Expenditures anticipated to be spent on Approved Development Activities, in each
case as projected, on a month-by-month basis, in the Initial Business Plan and
the annual budget described in Section 8.1.1(d), and (ii) all other Capital
Expenditures in excess of $50,000 individually or $100,000 in the aggregate, in
each case as the Lender may approve.
"Approved Development Activities" means the Borrowers' program of
additional development drilling, workover or recompletion work on the Mortgaged
Properties in order to bring into production Proven Reserves, in each case as
the Lender may approve.
"ARCOL" means ARCOL Inc., a Delaware corporation, and one of the Alliance
US Subsidiaries.
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"ARNO" means ARNO Inc., a Delaware corporation, and one of the Alliance US
Subsidiaries.
"Assignee Lender" is defined in Section 10.11.1.
"Assignment" means the Assignment and Conveyance of Overriding Royalty
Interest executed in connection with the Prior Agreement from LPC and New GOC to
the Designee, assigning to the Designee, as additional consideration for the
making of Commitments by the Lender and not as collateral security for the
Loans, overriding royalty interests in certain of its Hydrocarbon Interests.
"Authorized Officer" means, relative to any Obligor, those of its officers
whose signatures and incumbency shall have been certified to the Lender pursuant
to Section 6.1.1.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" or "Borrowers" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by the Lender on the same Business
Day and pursuant to the same Borrowing Request in accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed by
an Authorized Officer of any Borrower, substantially in the form of Exhibit C-1
hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
nor any other day on which banks are authorized or required to be closed in
Chicago, Illinois; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
"Capital Expenditures" means, for any period, the aggregate amount of all
expenditures of Alliance Plc and its consolidated Subsidiaries for fixed or
capital assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures.
"Cash Equivalent Investment" means, at any time:
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(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than nine months from the date
of issue, which is issued by
(i) a corporation (other than an Affiliate of any Borrower)
organized under the laws of any state of the United States or of the
District of Columbia and rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc., or
(ii) the Lender;
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by
(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000, or
(ii) the Lender; or
(d) any repurchase agreement entered into with the Lender (or other
commercial banking institution of the stature referred to in clause (c))
which
(i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c);
and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of the
Lender (or other commercial banking institution) thereunder.
"Celtic" means Celtic Basin Oil Exploration Ltd., a company organized under
the laws of England and Wales, and a wholly-owned Subsidiary of Manx.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means if (a) any Person or "group" (as defined in the
Securities Exchange Act of 1934) shall own directly or indirectly greater than
25% of the issued and outstanding share capital of Alliance Plc, (b) Alliance
Plc shall fail
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beneficially to own 100% of the outstanding shares of the voting capital stock
of Alliance Group, Manx or, after the Merger, LRI, on a fully-diluted basis, (c)
LRI shall fail beneficially to own 100% of the outstanding shares of the voting
capital stock of LPC, GOCA, New GOC or Enpro, on a fully diluted basis, (d)
Alliance Group shall fail beneficially to own 100% of the outstanding shares of
the voting capital stock of Source, ARNO, ARCOL or Alliance USA, on a fully
diluted basis, or (e) a majority of the members of the Board of Directors of
Alliance Plc are replaced without the prior written consent of the Lender.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and the regulations promulgated
thereunder.
"Collateral Value" shall mean, as at any date, (a) prior to the initial
Collateral Value Redetermination, the lesser of $18,500,000 or the amount of
Loans outstanding on the Effective Date, and (b) thereafter, that amount of
Indebtedness for borrowed money to be incurred under this Agreement that the
Lender shall determine can by supported by the Proven Reserves attributable to
Hydrocarbon Interests owned directly by the Borrowers which are a part of the
Mortgaged Properties, after an engineering and economic review of such reserves
conducted by the Lender taking into account the value of all those proved
developed producing oil and gas reserves and all other categories of Proven
Reserves attributable to the Mortgaged Properties that can by expected to become
proved developed producing reserves within the next following twelve (12) months
with funds that the Lender determines are available to the Borrowers for such
purpose and use.
"Collateral Value Deficiency" means the amount by which the sum of the
aggregate outstanding principal amount of all Loans plus Letter of Credit
Outstandings exceeds the then current Collateral Value.
"Collateral Value Deficiency Notification Date" shall mean the date on
which any notice of a Collateral Value Deficiency is received by the Borrowers.
"Collateral Value Redetermination" is defined in Section 2.6.
"Commitment" means, either the Tranche A Commitment and/or the Tranche B
Commitment, as the context may require.
"Commitment Amount" means, on any date, the Tranche A Commitment Amount
and/or the Tranche B Commitment Amount, as the case may be, as such amounts may
be reduced from time to time pursuant to Section 2.2.
"Commitment Availability" means, on any date, the excess of
(a) the then applicable Commitment Amount,
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over
(b) the aggregate outstanding principal amount of all applicable Loans
and all Letter of Credit Outstandings on such date.
"Commitment Termination Date" means the earliest of
(a) the Stated Maturity Date;
(b) the date on which either the Tranche A Commitment Amount and/or
the Tranche B Commitment Amount, as applicable, is terminated in full or
reduced to zero pursuant to Section 2.2; and
(c) the date on which any Commitment Termination Event occurs.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses (a) through (d)
of Section 9.1.9 with respect to any Borrower; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of the Loans and other Obligations to be due
and payable pursuant to Section 9.3, or
(ii) in the absence of such declaration, the giving of notice by
the Lender to any Borrower that the Commitments have been terminated.
"Consents" means consents and Approvals by Government Agencies to the
granting of the Mortgages in favor of the Lender.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
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"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by Authorized Officers of the
Borrowers, substantially in the form of Exhibit C-2 hereto.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with any Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Convertible Loan Notes" means the (Pounds)873,281.25 nominal amount of
convertible non-interest bearing, subordinated, unsecured loan notes 1997/2007
of Alliance Plc consisting of 1,078,125 notes of 81p each issued to the Designee
pursuant to a Loan Note Instrument substantially in the form of Exhibit N
hereto.
"Coverage Ratio" means the ratio of (i) the value of that portion of Proven
Reserves (being all proved developed producing oil and gas reserves plus, in the
Lender's sole discretion, a portion of proved developed behind pipe oil and gas
reserves, proved developed shut-in oil and gas reserves and proved undeveloped
oil and gas reserves) attributable to the Mortgaged Properties as determined by
the Lender in accordance with the Lender's customary standards for oil and gas
lending, to (ii) an amount equal to the aggregate principal amount of all Loans
then outstanding and Letter of Credit Outstandings.
"Credit Extension" means and includes
(a) the advancing of any Loans by the Lender in connection with a
borrowing hereunder, and
(b) any issuance or extension of a Letter of Credit.
"Current Ratio" means the ratio of
(a) the current assets of Alliance Plc and its consolidated
Subsidiaries
to
(b) the current liabilities (minus the current portion of their long
term Debt) of Alliance Plc and its consolidated Subsidiaries.
"Debt" means the outstanding principal amount of all Indebtedness of
Alliance Plc and its consolidated Subsidiaries, of the nature referred to in
clauses (a) and (b) of the definition of "Indebtedness," but excluding the
Convertible Loan Notes.
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"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Designee" is defined in Section 3.5.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrowers with the written consent of the Lender.
"Distribution Payments" is defined in Section 8.2.6.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means the office of the Lender designated as such on its
signature page hereto or designated in a Lender Assignment Notice or such other
office of the Lender (or any successor or assign of the Lender) within the
United States as may be designated from time to time by notice from the Lender,
as the case may be, to each other Person party hereto.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.8.
"Engineering Report" means one or more reports, in form and substance
satisfactory to the Lender, prepared at the sole cost and expense of the
Borrowers by a petroleum engineer acceptable to the Lender in its reasonable
business judgment, which shall evaluate the Proven Reserves and probable
reserves attributable to the Hydrocarbon Interests owned directly by the
Borrowers and constituting part of the Mortgaged Properties, as of the
immediately preceding January 31 or July 31. Each Engineering Report shall set
forth volumes, a projection of the future rate of production, Net Proceeds of
Production, present value of the Net Proceeds of Production, estimated costs of
Remedial Action, operating expenses and capital expenditures in each case based
upon economic assumptions reasonably acceptable to the Lender.
"Enpro" means ENPRO, INC., a Texas corporation and a wholly-owned
subsidiary of LRI.
"Enpro Margin" means the positive difference between (a) the aggregate
amount received by Enpro from third parties (which are not Affiliates) in
respect of the sale of Hydrocarbons which Enpro previously purchased from the
Borrowers or any of them and (b) the aggregate amount paid by Enpro to the
Borrowers in respect of the sale of Hydrocarbons to Enpro.
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"Environmental Laws" means all Applicable Laws relating to public health
and safety through protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 9.1.
"Excess Asset Cash Flow" means the proceeds from the sale of any Oil and
Gas Properties of any of the Borrowers, net of out-of-pocket costs and expenses
incurred in connection therewith, which shall be deposited in the Excess Asset
Cash Flow Account.
"Excess Asset Cash Flow Account" means the escrow account of the Borrowers
maintained with the Lender into which the Borrowers are obligated to deposit the
Excess Asset Cash Flow.
"Excess Asset Cash Flow Payment" means, as of the end of any Fiscal Year,
the amount in the Excess Asset Cash Flow Account, including all interest that
shall have accrued in respect of the aggregate Excess Asset Cash Flow deposited
therein.
"Excess Cash Flow" means the actual cash balance of Alliance Plc and its
consolidated Subsidiaries in excess of that shown in the Initial Business Plan
(excluding Excess Asset Cash Flow) which, pursuant to Section 3.1.1, shall be
paid to the Lender 45 days after the end of each Fiscal Quarter.
"Excess Cash Flow Payment" means, with respect to any Fiscal Quarter, an
amount equal to the positive difference, if any, between (a) an amount equal to
Excess Cash Flow applicable to a quarter, and (b) the Regular Principal Payments
for such Fiscal Quarter.
"Exchange Agreement" means that certain Exchange Agreement among the
Designee, LPC, New GOC and Alliance Plc, dated as of the Effective Date,
pursuant to which the Designee shall execute and deliver the Reassignment in
exchange for common stock of Alliance Plc and the Convertible Loan Notes
substantially in the form of Exhibit O hereto.
"Existing Agreement" is defined in the Third Recital.
"Facility" means the Tranche A Facility and/or the Tranche B Facility, as
the case may be.
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"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Lender of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal funds transactions in New York City
selected by the Lender.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on April 30; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1993") refer to the Fiscal Year ending on the
April 30 occurring during such calendar year.
"Forbearance Agreement" is defined in the fourth recital.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
"GOC" means Germany Oil Company, a Texas corporation, which has merged with
and into New GOC, which in turn has changed its name to "Germany Oil Company".
"GOCA" is defined in the preamble.
"Government Agency" means any federal, state, regional, tribal or local
government or governmental department or other entity charged with the
administration, interpretation or enforcement of any Applicable Law.
"Guaranties" means the guaranties of the Obligations, executed and
delivered pursuant to Section 6.1.4, substantially in the form of Exhibit D-3,
given by each of LRI and Enpro, and substantially in the form of Exhibit D-2,
given by Alliance Plc and Alliance Group.
"Guarantors" means Alliance Plc, Alliance Group, LRI and Enpro.
"Hazardous Material" means
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(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended;
(c) any petroleum, crude oil or fraction thereof;
(d) any hazardous, dangerous or toxic chemical, material, waste or
substance within the meaning of any Environmental Law;
(e) any radioactive material, including any naturally occurring
radioactive material, and any source, special or by-product material as
defined in 42 U.S.C. (S) 2011 et seq., and any amendments or
reauthorizations thereof;
(f) asbestos-containing materials in any form or condition; or
(g) polychlorinated biphenyls in any form or condition.
"Hedging Agreements" means:
(a) interest rate swap agreements, basis swap agreements, interest
rate cap agreements, forward rate agreements, interest rate floor
agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in
interest rates or currency exchange rates, and
(b) forward contracts, options, futures contracts, futures options,
commodity swaps, commodity options, commodity collars, commodity caps,
commodity floors and all other agreements or arrangements designed to
protect such Person against fluctuations in the price of commodities.
"Hedging Obligations" means, with respect to any Person, all liabilities
(including but not limited to obligations and liabilities arising in connection
with or as a result of early or premature termination of a Hedging Agreement,
whether or not occurring as a result of a default thereunder) of such Person
under a Hedging Agreement.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Highest Lawful Rate" is defined in Section 3.2.4.
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"Hydrocarbon Interests" means all rights, titles and interests in and to
oil and gas leases; oil; gas and mineral leases; other Hydrocarbon leases;
mineral interests; mineral servitudes; overriding royalty interests; royalty
interests; net profits interests; production payment interests; and other
similar interests.
"Hydrocarbons" means, collectively, oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate and all other liquid or
gaseous hydrocarbons and related minerals and all products therefrom, in each
case whether in a natural or a processed state.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
any Borrower to be in default of any of its obligations under Section
8.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all other items which, in accordance with GAAP, would be included
as liabilities on the liability side of the balance sheet of such Person as
of the date at which Indebtedness is to be determined;
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(d) net liabilities of such Person under all Hedging Obligations;
(e) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(f) all Contingent Liabilities of such Person.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Initial Business Plan" means the Alliance Resources Plc and LaTex
Resources Inc., Outline Business Plan, for the two-year period beginning in
April 1997 attached hereto as Schedule VII.
"Interest Expense" means, for any period, interest expense of Alliance Plc
and its consolidated Subsidiaries for such period (including all imputed
interest under Hedging Agreements, but excluding all fees paid under Section
3.3).
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and ending on (but excluding) the day which numerically corresponds to such date
one, three or six months thereafter (or, if for a period of less than one month
or if such month has no numerically corresponding day, on the last Business Day
of such month), in each case as the Borrowers may select in its relevant notice
pursuant to Section 2.3 or 2.4; provided, however, that
(a) no more than five different Interest Periods may be in effect at
any time;
(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;
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(c) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applies to LIBO Rate Loans,
such next following Business Day is the first Business Day of another
calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day);
(d) no Interest Period may end later than the Stated Maturity Date;
and
(e) the Borrowers shall select each Interest Period for a particular
LIBO Rate Loan so as not to require (as reasonably foreseeable as possible)
a prepayment of such LIBO Rate Loan during such Interest Period.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business and excluding prepaid
expenses incurred in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Issuance Request" means a request and certificate duly executed by the
chief executive, accounting or financial Authorized Officer of the Borrowers, in
substantially the form of Exhibit K attached hereto (with such changes thereto
as may be agreed upon from time to time by the Lender and the Borrowers).
"Lender Assignment Notice" means a Lender Assignment Notice substantially
in the form of Exhibit G hereto.
"Lender" is defined in the preamble.
"Letter of Credit" is defined in Section 4.1.
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"Letter of Credit Availability" means, at any time, the lesser of
(a) the positive difference between
(i) $200,000
and
(ii) the then Letter of Credit Outstandings,
or
(b) the Tranche A Commitment Amount at such time less the sum of (i)
any Tranche A Loans then outstanding at such time and (ii) any
Letter of Credit Outstandings at such time.
"Letter of Credit Outstandings" means, at any time, an amount equal to the
sum of
(a) the aggregate Stated Amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate Stated Amount shall be
adjusted, from time to time, as a result of drawings, the issuance of
Letters of Credit, or otherwise),
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO Rate" means, with respect to each Interest Period for a LIBO Rate
Loan, the rate of interest equal to the average (rounded upward, if necessary,
to the nearest 1/16th of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Lender's LIBOR Office in the
London interbank market as at or about 11:00 a.m. London time two Business Days
prior to the beginning of such Interest Period for Dollar deposits of amounts
comparable to the outstanding principal amount of the LIBO Rate Loan for which
an interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such LIBO Rate Loan.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate.
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
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Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Lender on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Lender, two Business Days before the first day of such Interest Period.
"LIBOR Office" means the office of the Lender designated as such on the
signature page hereto or designated in a Lender Assignment Notice or such other
office of the Lender (or any successor or assign of the Lender) as designated
from time to time by notice from the Lender to the Borrowers, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of the Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest of any kind or nature whatsoever in
respect of any Property (including those created by, arising under or evidenced
by any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as debtor,
under the Uniform Commercial Code or any comparable law) and any contingent or
other agreement to provide any of the foregoing.
"Loans" is defined in Section 2.1.
"Loan Document" means this Agreement, the Note, the Security Documents, the
Warrant Documents, all Hedging Agreements and all other agreements relating to
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this Agreement entered into from time to time between any Borrower (or an
Affiliate of any Borrower) and the Lender (or an Affiliate of the Lender).
"LPC" is defined in the preamble.
"LRI" means LATEX RESOURCES, INC., a Delaware corporation and the sole
shareholder of LPC, GOCA, New GOC and Enpro. Pursuant to the Merger Agreement,
Alliance Newco shall merge with and into LRI. LRI shall be the survivor of the
Merger and shall assume all of the assets and liabilities of Alliance Newco.
"MMBtu" means one million British Thermal Units.
"Management Agreement" means that certain Amended and Restated Management
Agreement dated as of the Effective Date, between Alliance Plc, LRI, the
Alliance US Subsidiaries, LPC and New GOC.
"Manx" means Manx Petroleum Plc, a company organized under the laws of
England and Wales, and a wholly-owned subsidiary of Alliance Plc.
"Material Adverse Effect" means with respect to any matter that such matter
(a) could reasonably be expected materially and adversely to affect
the assets, business, properties, condition (financial or otherwise),
prospects, or results of operations of Alliance Plc and its Subsidiaries on
a consolidated basis, or the value or condition of the Properties of
Alliance Plc and its Subsidiaries on a consolidated basis, or the ability
of any Borrower or any other Obligor to perform its obligations under any
of the Loan Documents, or
(b) has been brought by or before any court or arbitrator or any
Governmental Agency and draws into question or otherwise has or reasonably
could be expected to have a material adverse effect on the validity or
enforceability of any material provision of any Loan Document against any
Obligor party thereto or the rights, remedies and benefits available to the
Lender under the Loan Documents.
"Merger" means the merger of Alliance Newco with and into LRI pursuant to
the Merger Agreement.
"Merger Agreement" means that certain Agreement and Plan of Merger dated as
of August 12, 1996, between LRI, Alliance Newco and Alliance Plc, as amended on
September 16, 1996, December 20, 1996, February 13, 1997 and March 13, 1997.
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"Monthly Payment Date" means, commencing April 30, 1997, the last Business
Day of each calendar month.
"Mortgages" means the Mortgage, Deed of Trust, Assignment, Security
Agreement and Financing Statement, the Amended and Restated Mortgage, Deed of
Trust, Assignment, Security Agreement and Financing Statement, the First
Supplemental Mortgage, Deed of Trust, Assignment, Security Agreement, Financing
Statement and Fixture Filing, and any similar instruments, executed and
delivered pursuant to Section 6.1.6, substantially in the form(s) of Exhibit E-1
hereto, as amended, supplemented, restated or otherwise modified from time to
time.
"Mortgaged Properties" is defined in Section 6.1.6.
"Net Proceeds of Production" means the difference between (a) the sum of
(w) all revenue received by or credited to the account of the Borrowers from the
sale of Hydrocarbons and other minerals in, under or produced after March 1,
1997, from their Oil and Gas Properties, (x) all net proceeds from Hedging
Agreements entered into pursuant to Section 8.1.8, (y) the Enpro Margin and (z)
all amounts received by the Borrowers or any of them, in their respective
capacities as operators of certain Oil and Gas Properties, from other working
interest owners pursuant to "Article III -Overhead" of the COPAS form of
Accounting Procedure (and similar agreements or provisions) attached to
operating agreements pertaining to such Properties and (b) the sum of (i)
royalties, overriding royalties, net profits interests and other existing
burdens payable out of production, (ii) normal and reasonable direct, leasehold
operating expenses (excluding any and all charges by any Borrower or any
Affiliate of any Borrower or for general and administrative or "overhead"
expenses pertaining to the Mortgaged Properties in excess of the amount set
forth in the Initial Business Plan per month), (iii) severance, ad valorem,
excise and windfall profit taxes or other government taxes or similar levies or
impositions hereinafter enacted or imposed, (iv) actual, reasonable workover
expenses (but not Capital Expenditures) for the Mortgaged Properties which are
necessary to maintain production from existing completion intervals or zones in
existing wells, and from wells and intervals or zones which become producing
wells, intervals or zones, as the case may be, as a result of Approved
Development Activities, (v) all net payments made in respect of the Hedging
Agreements entered into pursuant to Section 8.1.8, in each case to the extent
such deductions are properly allocable to the Borrowers' Oil and Gas Properties
and (vi) all actual, reasonable and necessary fees and expenses incurred by any
Borrower in connection with the preparation of Engineering Reports.
"New GOC" is defined in the preamble.
"Note" means the secured promissory note of the Borrowers payable to the
order of the Lender, in the form of Exhibit A hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the
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aggregate Indebtedness of the Borrowers to the Lender resulting from
outstanding Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrowers and/or any other Obligor arising under or in connection with this
Agreement, the Note and each other Loan Document, including without limitation,
all Hedging Obligations arising under Hedging Agreements between any Borrower
(or any Affiliate of any Borrower) and the Lender (or any Affiliate of the
Lender).
"Obligor" means the Borrowers, LRI, Alliance Plc, Enpro or any other Person
(other than the Lender or any Affiliate of the Lender) obligated under, or
otherwise a party to, any Loan Document.
"Oil and Gas Properties" means Hydrocarbon Interests; the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Agency having jurisdiction)
which may affect all or any portion of the Hydrocarbon Interests; all operating
agreements, joint venture agreements, contracts and other agreements which
relate to any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, the lands covered thereby and all oil
in tanks and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
profits a prendre, hereditaments, appurtenances and Properties in any way
appertaining, belonging, affixed or incidental to the Hydrocarbon Interests,
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment or other
personal property which may be on such premises for the purpose of drilling a
well or for other similar temporary uses) and including any and all oil wells,
gas wells, water wells, injection wells or other wells, buildings, structures,
fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, tanks and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing.
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"Organic Document" means, relative to any corporate Obligor, its
certificate of incorporation, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its authorized shares of
capital stock, and, relative to any partnership Obligor, its partnership
agreement.
"Original Borrowers" is defined in the preamble.
"Overriding Royalty Interest" means the interests conveyed and assigned by
the Assignment.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which any Borrower or
any corporation, trade or business that is, along with any Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to the Lender, 100%, as such percentage may be
adjusted from time to time pursuant to Lender Assignment Notice(s) executed by
the Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11.
"Person" means any natural person, corporation, partnership, joint venture,
limited liability company, firm, association, trust, Governmental Agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreements" means a Pledge Agreement executed and delivered
pursuant to Section 6.1.5, substantially in the form of Exhibit F-1 given by
each of Alliance Plc and Alliance Group, and substantially in the form of
Exhibit F-2 given by LRI, as amended, supplemented, restated or otherwise
modified from time to time.
"Prior Agreement" is defined in the Second Recital.
"Proceeds Account" is defined in Section 3.4.
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"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Proven Reserves" means collectively, "proved oil and gas reserves,"
"proved developed producing oil and gas reserves," "proved developed non-
producing oil and gas reserves" (consisting of proved developed behind pipe oil
and gas reserves and proved developed shut-in oil and gas reserves), and "proved
undeveloped oil and gas reserves," as such terms are defined by the U.S.
Securities and Exchange Commission in its standards and guidelines.
"Reassignment" means the Assignment of Overriding Royalty Interest
substantially in the form of Exhibit J, pursuant to which the Overriding Royalty
Interest granted by the Assignment is assigned by the Designee to LPC and New
GOC.
"Registration Rights Agreement" means the Registration Rights Agreement,
substantially in the form of Exhibit B-1, between Alliance Plc and the Lender or
the Designee.
"Regular Principal Payment" means a scheduled repayment of the aggregate
principal amount of all Loans equal to the respective amounts set forth on
Schedule II (without giving effect to payments made or received under interest
rate Hedging Agreements); provided however, that the final scheduled repayment
shall be in an amount sufficient to repay all Loans in full.
"Reimbursement Obligation" is defined in Section 4.5.
"Release" means a "release," as such term is defined in CERCLA.
"Remedial Action" means any action under Environmental Laws required to (a)
clean up, remove, treat, dispose of, abate, or in any other way address
pollutants (including Hazardous Materials) in the environment, (b) prevent the
Release or threat of a Release or minimize the further Release of pollutants, or
(c) investigate and determine if a remedial response is needed and to design
such a response and any post-remedial investigation, monitoring, operation, and
maintenance and care.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
time.
"Restricted Payment Tests" means compliance with each of the following
restrictions (both before and immediately after giving effect to the applicable
Distribution Payment):
(a) the Current Ratio shall be not less than 1.10:1.0;
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(b) Working Capital shall not be less than $1.00;
(c) there shall exist no Collateral Value Deficiency; and
(d) no Default or Event of Default shall have occurred and be
continuing.
"Security Agreements" means a security agreement and any similar instrument
or agreement, executed and delivered pursuant to Section 6.1.20, substantially
in the form of Exhibit M hereto, as amended, supplemented, restated or otherwise
modified from time to time.
"Security Documents" means, collectively, (a) the Guaranties, (b) the
Pledge Agreements, (c) the Mortgages, and (d) the Security Agreements, together
with any exhibits, schedules and other attachments to such documents and any
financing statements related thereto, as such documents, exhibits, schedules,
attachments or financing statements may be, from time to time, amended,
supplemented, restated or otherwise modified.
"Source" is defined in the preamble.
"Stated Amount" of each Letter of Credit means the "Stated Amount" of such
Letter of Credit as defined therein.
"Stated Maturity Date" means March 31, 2000.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) or (b) any partnership, limited liability company, joint venture
association, firm or other business entity in which more than 50% of the equity
interest or voting power is at the time directly or indirectly owned by such
Person, by such Person and one or more other Subsidiaries of such Person, or by
one or more other Subsidiaries of such Person.
"Surety Instrument" means all letters of credit (including commercial and
standby), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"Taxes" is defined in Section 5.6.
"Tranche A Availability Termination Date" means the Business Day
immediately following the Effective Date.
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"Tranche A Commitment" means the Lender's commitment pursuant to Section
2.1.1 to make Tranche A Loans to the Borrowers in accordance with the terms and
provisions of this Agreement.
"Tranche A Commitment Amount" means the lesser of $18,500,000 or the amount
of Loans outstanding on the Effective Date, as reduced from time to time
pursuant to the provisions of Section 2.2.
"Tranche A Facility" means the Facility providing for the Tranche A
Commitment and the Tranche A Loans.
"Tranche A Loan" means each loan made by the Lender to the Borrowers from
time to time pursuant to its Tranche A Commitment in accordance with Sections
2.1.1 and 2.3.
"Tranche B Availability Termination Date" means 90 calendar days from the
Effective Date.
"Tranche B Commitment" means the Lender's commitment pursuant to Section
2.1.2 to make Tranche B Loans to the Borrowers, and to issue Letters of Credit,
in accordance with the terms and provisions of this Agreement.
"Tranche B Commitment Amount" means $2,500,000, as reduced from time to
time pursuant to the provisions of Section 2.2.
"Tranche B Facility" means the Facility providing for the Tranche B
Commitment, the Tranche B Loans and the Letters of Credit.
"Tranche B Loan" means each loan made by the Lender to the Borrowers from
time to time pursuant to its Tranche B Commitment in accordance with Sections
2.1.2 and 2.3.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"Undertaking" means that certain Amended and Restated Undertaking and
Indemnity from Alliance USA, substantially in the form of Exhibit D-1.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Warrant Documents" means the Warrant Instrument, the Warrants, the
Exchange Agreement and the Registration Rights Agreement.
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"Warrant Instrument" means the Warrant Instrument, substantially in the
form of Exhibit B-2, between Alliance Plc and the Lender or the Designee.
"Warrants" means the warrants, substantially in the form of Exhibit B-3,
from Alliance Plc to the Lender or the Designee.
"Welfare Plan" means a "welfare plan", as such term is defined in section
3(1) of ERISA.
"Working Capital" means the excess of
(a) current assets of Alliance Plc and its consolidated Subsidiaries
over
(b) current liabilities, excluding the current portion of Debt payable
more that twelve months from the date of the report provided pursuant to
Section 8.1.1.(l), of Alliance Plc and its consolidated Subsidiaries.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, notice and other
communication or other Loan Document delivered from time to time in connection
with this Agreement or any other Loan Document.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 8.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those United States generally accepted accounting principles
("GAAP") applied in the preparation of the financial statements referred to in
Section 7.7.
SECTION 1.5. INTERPRETATIONAL PROVISIONS.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
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(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(iv) The term "property" includes any kind of property or asset,
real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each
be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Lender by way of consent,
approval or waiver shall be deemed modified by the phrase "in its sole
discretion."
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Lender, the
Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lender merely because
of the Lender's involvement in their preparation.
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ARTICLE II.
COMMITMENTS, BORROWING PROCEDURES AND NOTE
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including Article V), the Lender agrees to make loans ("Loans")
to the Borrowers equal to the aggregate amount of the Borrowing of Loans
requested by the Borrowers to be made pursuant to the Commitments on such day
described in this Section 2.1. On the terms and subject to the conditions
hereof, the Borrowers may from time to time borrow and prepay Loans but may not
reborrow any amounts paid or pre-paid.
SECTION 2.1.1. TRANCHE A COMMITMENT. From time to time on any Business
Day during the period from and after the Effective Date to the earlier to occur
of (x) Tranche A Availability Termination Date and (y) any Commitment
Termination Date relating to all Commitments or to the Tranche A Commitment, the
Lender will make Tranche A Loans to the Borrowers equal to the amount of the
Tranche A Loan requested by the Borrowers to be made on such day in the
applicable Borrowing Request therefor. The Borrowers acknowledge that, as of
March 14, 1997, the aggregate outstanding principal amount of all Tranche A
Loans is $16,861,274.87.
SECTION 2.1.2. TRANCHE B COMMITMENT. From time to time on any Business
Day during the period from and after the Effective Date to the earlier to occur
of (x) Tranche B Availability Termination Date, and (y) any Commitment
Termination Date relating to all Commitments or to the Tranche B Commitment, the
Lender may, in its discretion, make Tranche B Loans to the Borrowers equal to
the aggregate amount of the Tranche B Loan requested by the Borrowers to be made
on such day in the applicable Borrowing Request therefor. The Borrowers
acknowledge that, as of March 14, 1997, the aggregate outstanding principal
amount of all Tranche B Loans is $1,556,721.95. On the Effective Date, the
foregoing outstanding principal amount of Tranche B Loans will be consolidated
into a new Tranche A such that, on the Effective Date, the aggregate outstanding
principal amount of all Tranche B Loans will be zero.
SECTION 2.1.3. COMMITMENT TO ISSUE LETTERS OF CREDIT. From time to time
on any Business Day, the Lender will issue Letters of Credit, in accordance with
Article IV.
SECTION 2.1.4. LENDER NOT REQUIRED TO MAKE LOANS UNDER CERTAIN
CIRCUMSTANCES. The Lender shall not be required to make any Loan if, after
giving effect thereto
(a) the aggregate outstanding principal amount of all Tranche A Loans
would exceed the Tranche A Commitment Amount, or
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(b) the aggregate outstanding principal amount of all Tranche B Loans
would exceed the Tranche B Commitment Amount less the Letter of Credit
Outstandings, or
(c) a Collateral Value Deficiency would exist, or
(d) as to any Tranche B Loan, if after the Borrowing thereof, the
Coverage Ratio would be less than 1.0 or if the Lender does not, in its
discretion, approve such Borrowing.
SECTION 2.1.5. LENDER NOT REQUIRED TO ISSUE LETTERS OF CREDIT UNDER
CERTAIN CIRCUMSTANCES. The Lender shall not be required to issue any Letter of
Credit if, after giving effect thereto
(a) the aggregate outstanding principal amount of all Tranche B Loans
would exceed the Tranche B Commitment Amount less the Letter of Credit
Outstandings,
(b) a Collateral Value Deficiency would exist,
(c) all Letter of Credit Outstandings would exceed $200,000, or
(d) the Coverage Ratio would be less than 1.0.
SECTION 2.2. REDUCTION OF COMMITMENT AMOUNTS. Any Commitment Amount is
subject to reduction from time to time pursuant to this Section 2.2.
SECTION 2.2.1. OPTIONAL. The Borrowers may, from time to time on any
Business Day, voluntarily reduce the Tranche A Commitment Amount or the Tranche
B Commitment Amount or any of them; provided, however, that all such reductions
shall require at least three Business Days' prior notice to the Lender and be
permanent, and any partial reduction of either Commitment Amount shall be in a
minimum amount of $250,000 and in an integral multiple of $50,000.
SECTION 2.2.2. MANDATORY.
(a) On the Tranche A Availability Termination Date, the unused portion
of the Tranche A Commitment Amount shall, without any further action,
automatically and permanently be cancelled.
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(b) On the Tranche B Availability Termination Date, the unused portion
of the Tranche B Commitment Amount shall, without any further action,
automatically and permanently be cancelled.
(c) On any Commitment Termination Date, the Commitment Amount of each
Facility shall be reduced to zero.
SECTION 2.3. BORROWING PROCEDURE. By delivering a Borrowing Request to
the Lender on or before 10:00 a.m. (Chicago time) on a Business Day, the
Borrowers may from time to time irrevocably request, on not less than three nor
more than five Business Days' notice, or, in the case of a Base Rate Borrowing,
one Business Day's notice, that a Borrowing be made in a minimum amount of
$250,000 and an integral multiple of $50,000, or in the unused amount of the
applicable Commitment. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be made on the Business Day specified in such
Borrowing Request. The Lender shall make such funds available to the Borrowers
by wire transfer to the accounts the Borrowers shall have specified in their
Borrowing Request.
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Lender on or before 10:00 a.m. (Chicago
time) on a Business Day, the Borrowers may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of $250,000 and an integral multiple of
$50,000, of any Loans, in the case of Base Rate Loans, be converted into LIBO
Rate Loans or, in the case of LIBO Rate Loans, be converted into a Base Rate
Loan or continued as a LIBO Rate Loan (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three
Business Days before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that no portion of the
outstanding principal amount of any LIBO Rate Loan may be continued as, and no
portion of any Base Rate Loan may be converted into, LIBO Rate Loans when any
Default has occurred and is continuing.
SECTION 2.5. LOAN ACCOUNTS AND NOTE.
(a) The Loans made by the Lender shall be evidenced by one or more
loan accounts or records maintained by the Lender in the ordinary course of
business. The loan accounts or records maintained by the Lender shall be
conclusive absent manifest error of the amount of the Loans made by the
Lender to the Borrowers and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit or
otherwise affect the obligations of the Borrowers hereunder to pay any
amount owing with respect to the Loans.
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(b) The Loans shall also be evidenced by a Note payable to the order
of the Lender in a maximum principal amount equal to the original,
aggregate Commitment Amount. The Borrowers hereby irrevocably authorize
the Lender to make (or cause to be made) appropriate notations on the grid
attached to the Note (or on any continuation of such grid) or in other
books and records maintained by the Lender, which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate applicable to the Loans evidenced thereby (the Borrowers may
from time to time reasonably request a copy of such grid). Such notations
shall be conclusive and binding on the Borrowers absent manifest error;
provided, however, that the failure of the Lender to make any such
notations shall not limit or otherwise affect any Obligations of the
Borrowers or any other Obligor.
(c) The Borrowers acknowledge that the Note delivered to the Lender as
of the Effective Date amends, restates and renews the promissory notes
given by the Borrowers under the Existing Agreement, which amended,
restated, consolidated and renewed certain promissory notes and other
evidence of indebtedness then outstanding.
SECTION 2.6. COLLATERAL VALUE REDETERMINATION.
(a) Within 60 days after receipt of the Engineering Report required to
be delivered semi-annually, commencing as of December 31, 1997 and based
initially on the Engineering Report required to be delivered in mid 1997,
the Lender shall notify the Borrowers in writing of the Collateral Value
determined on the basis of such Engineering Report. Each such determination
is herein called a "Collateral Value Redetermination". Each Collateral
Value Redetermination shall be effective when the Borrowers are notified of
the amount of the redetermined Collateral Value by the Lender.
(b) The Collateral Value is also subject to adjustment as provided for
in Section 3.1.2.
SECTION 2.7. PURPOSES. The Borrowers shall apply the proceeds of each
Loan only in the following manner:
(a) in the case of Tranche A Loans, to repay, refinance or acquire
existing indebtedness and for working capital purposes of the Borrowers and
to finance Approved Development Activities; and
(b) in the case of Tranche B Loans, to fund partially the expense of
terminating certain Hedging Agreements, and paying all Hedging Obligations
under such Hedge Agreements at the time of termination, as approved by the
Lender.
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ARTICLE III.
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS AND CERTAIN COLLATERAL VALUE
MATTERS. The Borrowers shall repay the unpaid principal amount of the Loans as
set forth in this Section 3.1.
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrowers shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date.
Prior thereto, the Borrowers
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; provided, however, that
(i) any such prepayment shall be made pro rata among Loans of the
same type;
(ii) no such prepayment of any LIBO Rate Loan may be made on any
day other than the last day of the Interest Period for such Loan;
(iii) all such voluntary prepayments shall require at least
three but no more than five Business Days' prior written notice to the
Lender (which notice is irrevocable) stating the date and amount of
such prepayment and the type of Loan to be prepaid; and
(iv) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $100,000 and an integral multiple of
$50,000;
(b) shall, on each date when any reduction in any Commitment Amount
shall become effective, including pursuant to Section 2.2, make a mandatory
prepayment (which shall be applied (or held for application, as the case
may be) by the Lender to the payment of the aggregate unpaid principal
amount of those Loans then outstanding and then to the payment of the then
Letter of Credit Outstandings) equal to the excess, if any, of the
aggregate outstanding principal amount of all Loans and Letter of Credit
Outstandings over such Commitment Amount as so reduced;
(c) shall make prepayments as specified in Section 3.1.2;
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(d) shall, on each Monthly Payment Date, make a payment in an amount
not less than the interest payment required pursuant to Section 3.2.3;
(e) shall, on each Monthly Payment Date, make a payment in an amount
not less than the Regular Principal Payment applicable to that month to be
applied first to Tranche A Loans and then to Tranche B Loans and Letter of
Credit Outstandings; and
(f) shall 45 days after the end of each Fiscal Quarter, beginning with
the Fiscal Quarter ending on July 31, 1997, make a payment in an amount not
less than the Excess Cash Flow Payment applicable to that quarter to be
applied first to Tranche A Loans, then to Tranche B Loans and then to
Letter of Credit Outstandings;
(g) shall, on the last Business Day of each Fiscal Year, make a
payment in an amount not less than the Excess Asset Cash Flow Payment
applicable to that year to be applied first to Tranche A Loans, then to
Tranche B Loans and then to Letter of Credit Outstandings;
(h) shall, immediately upon any acceleration of the Loans pursuant to
Section 9.2 or Section 9.3, repay all Loans, unless, pursuant to Section
9.3, only a portion of all Loans is so accelerated.
Each payment or prepayment of any Loans made pursuant to this Section shall be
without premium or penalty, except as may be required by Section 5.4, and shall
be applicable, to the extent of such prepayment, in the inverse order of
maturity. No voluntary prepayment of principal of any Loans or any prepayment
pursuant to the preceding clause (c) shall cause a reduction in any Commitment
Amount.
SECTION 3.1.2. COLLATERAL VALUE DEFICIENCIES. Upon the occurrence of a
Collateral Value Deficiency, the Lender may notify the Borrowers of such
Collateral Value Deficiency. Within 30 days from and after the Collateral Value
Deficiency Notification Date, the Borrowers shall, at their election, take one
of the following actions:
(a) execute and deliver to the Lender supplemental or additional
Security Documents, in form and substance satisfactory to the Lender and
its counsel, securing payment of the Note and the other Obligations and
covering additional Oil and Gas Properties directly owned by the Borrowers
which are not then covered by any Loan Document and which are of a type and
nature, and having a value (determined by the Lender using customary
standards for oil and gas lending) satisfactory to the Lender; or
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(b) make a payment with respect to the Obligations (which shall be
applied (or held for application, as the case may be) by the Lender to the
payment of the aggregate unpaid principal amount of those Loans then
outstanding and then to the payment of the then Letter of Credit
Outstandings) in an aggregate principal amount sufficient to eliminate such
Collateral Value Deficiency.
If the Borrowers shall elect to execute and deliver supplemental or additional
Security Documents to the Lender pursuant to clause (a), they shall provide the
Lender with descriptions of the additional assets to be collaterally assigned
(together with current valuations, Engineering Reports and title evidence
applicable thereto, each of which shall be in form and substance satisfactory to
the Lender) within 20 days after the Collateral Value Deficiency Notification
Date. Such supplemental or additional Security Documents shall be subject to
the terms of Section 8.1.7. If the Borrowers fail to take either of the actions
described above within such 30-day period, then without any necessity for notice
to the Borrowers or any other person, the Borrowers shall become obligated
immediately to pay Obligations in an aggregate principal amount equal to the
applicable Collateral Value Deficiency.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. RATE. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrowers may elect that Loans
accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the Alternate Base Rate plus the Applicable Margin from time to
time in effect; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. POST-MATURITY RATES. After the date any principal amount
of any Loan shall have become due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise), after any other monetary Obligation of
the Borrowers shall have become due and payable, and after the date any other
Event of Default shall have occurred (and so long as such Event of Default shall
be continuing), the
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Borrowers shall pay, but only to the extent permitted by Applicable Law,
interest (after as well as before judgment) on all Obligations at a rate per
annum equal to
(a) with respect to LIBO Rate Loans for the period from the date such
Loan becomes due and payable to the end of the then current Interest
Period, the higher of (i) the sum of the LIBO Rate (Reserve Adjusted) for
such Interest Period plus the Applicable Margin plus a margin of 3%, or
(ii) the sum of the Alternate Base Rate plus the Applicable Margin plus a
margin of 3%; or
(b) in all other cases, the sum of the Alternate Base Rate plus the
Applicable Margin plus a margin of 3%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date;
(b) on the date of any optional or required payment or prepayment, in
whole or in part, of principal outstanding on such Loan and on that portion
of such Loan so paid or prepaid;
(c) with respect to Base Rate Loans, on each Monthly Payment Date
occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the 90th day of such Interest Period); and
(e) on that portion of any Loans which is accelerated pursuant to
Section 9.2 or Section 9.3, immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount shall have
become due and payable (whether on the Stated Maturity Date, upon acceleration
or otherwise) shall be payable upon demand.
SECTION 3.2.4. MAXIMUM INTEREST. It is the intention of the parties
hereto to conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the Obligations of the Borrowers to the Lender under
this Agreement shall be subject to the limitation that payments of interest
shall not be required to the extent that receipt thereof would be contrary to
provisions of Applicable Law applicable to the Lender limiting rates of interest
which may be charged or collected by the Lender. Accordingly, if the
transactions contemplated hereby would be
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usurious under Applicable Law with respect to the Lender then, in that event,
notwithstanding anything to the contrary in this Agreement, it is agreed as
follows:
(a) the provisions of this Section 3.2.4 shall govern and control;
(b) the aggregate of all consideration which constitutes interest
under Applicable Law that is contracted for, charged or received under this
Agreement, or under any of the other aforesaid agreements or otherwise in
connection with this Agreement by the Lender shall under no circumstances
exceed the maximum amount of interest allowed by Applicable Law (such
maximum lawful interest rate, if any, with respect to the Lender herein
called the "Highest Lawful Rate"), and any excess shall be credited to the
Borrowers by the Lender (or, if such consideration shall have been paid in
full, such excess refunded to the Borrowers);
(c) all sums paid, or agreed to be paid, to the Lender for the use,
forbearance and detention of the indebtedness of the Borrowers to the
Lender hereunder shall, to the extent permitted by Applicable Law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest is
uniform throughout the full term thereof; and
(d) if at any time the interest provided pursuant to Sections 3.2.1
and 3.2.2 together with any other fees payable pursuant to this Agreement
and deemed interest under Applicable Law, exceeds that amount which would
have accrued at the Highest Lawful Rate, the amount of interest and any
such fees to accrue to the Lender pursuant to this Agreement shall be
limited, notwithstanding anything to the contrary in this Agreement, to
that amount which would have accrued at the Highest Lawful Rate, but any
subsequent reductions, as applicable, shall not reduce the interest to
accrue to such Lender pursuant to this Agreement below the Highest Lawful
Rate until the total amount of interest accrued pursuant to this Agreement
and such fees deemed to be interest equals the amount of interest which
would have accrued to such Lender if a varying rate per annum equal to the
interest provided pursuant to Sections 3.2.1 and 3.2.2 had at all times
been in effect, plus the amount of fees which would have been received but
for the effect of this Section 3.2.4.
SECTION 3.3. FEES. The Borrowers agree to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. STRUCTURING FEE. The Borrowers have paid to the Lender, on
or before the Effective Date, a structuring fee of $200,000 payable in stock of
Alliance Plc.
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SECTION 3.3.2. CLOSING FEE. [Not used.]
SECTION 3.3.3. ENGINEERING FEE. Beginning March 31, 1998, the Borrowers
agree to pay to the Lender an annual engineering and redetermination fee in the
amount of $25,000.
SECTION 3.3.4. LETTER OF CREDIT FACE AMOUNT FEE. The Borrowers agree to
pay to the Lender a fee for each Letter of Credit for the period from and
including the date of the issuance of such Letter of Credit to (but not
including) the date upon which such Letter of Credit expires, at a rate per
annum equal to the Applicable Margin for LIBO Rate Loans on the face amount of
such Letter of Credit. Such fee shall be payable by the Borrowers in arrears on
each Monthly Payment Date, and on the Commitment Termination Date for any period
then ending for which such fee shall not theretofore have been paid, commencing
on the first such date after the issuance of such Letter of Credit.
SECTION 3.3.5. LETTER OF CREDIT ISSUANCE FEE. The Borrowers agree to pay
to the Lender an issuance fee for each Letter of Credit issued by Lender for the
period from and including the date of issuance of such Letter of Credit to (but
not including) the date upon which such Letter of Credit expires, of the greater
of 0.25 of 1% of the face amount of such Letter of Credit or $100.00. Such fee
shall be payable by the Borrowers in arrears on each Monthly Payment Date and on
the Commitment Termination Date for any period then ending for which such fee
shall not theretofore have been paid, commencing on the first such date after
the issuance of such Letter of Credit.
SECTION 3.3.6. LETTER OF CREDIT ADMINISTRATIVE FEE. The Borrowers agree
to pay to the Lender all reasonable administrative expenses of the Lender in
connection with the maintenance, modification (if any) and administration of
each Letter of Credit issued by the Lender upon demand from time to time
pursuant to the Lender's schedule of charges then in effect.
SECTION 3.4. PROCEEDS ACCOUNT AND EXCESS ASSET CASH FLOW ACCOUNT.
(a) The Security Documents contain an assignment to the Lender by the
Borrowers of all production of Hydrocarbons and all proceeds attributable
thereto properly allocable to the Mortgaged Properties. Notwithstanding
such assignment of production, the Borrowers may, until the Lender shall
give notice to the contrary, which notice shall not be unreasonably given,
receive such proceeds. Thereafter, all such proceeds from the sale of such
production shall be paid directly into an account of the Borrowers
maintained with the Lender (the "Proceeds Account"). The Borrowers hereby
grant to the Lender, subject to the prior assignment in favor of the Lender
of such production and its proceeds, a security interest in the Proceeds
Account and all proceeds thereof.
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(b) The Borrowers may, until the Lender shall give notice to the
contrary, withdraw funds from the Excess Asset Cash Flow Account to pay
operating expenses and all other expenses in accordance with the Initial
Business Plan. Upon any such withdrawal, the Borrowers shall give notice
to the Lender as to the amount and purpose of the withdrawal. The
Borrowers hereby grant to the Lender a security interest in the Excess
Asset Cash Flow Account and all proceeds thereof.
SECTION 3.5. Warrants and Convertible Loan Notes Are Not Collateral
Security. In addition to interest paid on the Loans, Alliance Plc has granted
the Warrants and the Convertible Loan Notes to the Lender's designee
("Designee"), as additional consideration payable to the Lender in exchange for
the Reassignment to be retained in perpetuity and not as additional collateral
security.
ARTICLE IV.
LETTERS OF CREDIT
SECTION 4.1. ISSUANCE REQUESTS. By delivering to the Lender an Issuance
Request on or before 12:00 noon (Chicago time), the Borrowers may request, from
time to time prior to the earlier to occur of (x) the Tranche A Availability
Termination Date and (y) any Commitment Termination Date relating to all
Commitments or to the Tranche A Commitment, and on not less than three nor more
than ten Business Days' notice, that the Lender issue an irrevocable standby
letter of credit in substantially the form of Exhibit L hereto, or in such other
form as may be mutually agreed by the Borrowers and the Lender (each a "Letter
of Credit"), in support of financial obligations of the Borrowers incurred in
the Borrowers' ordinary course of business and which are described in such
Issuance Request. Each Letter of Credit shall by its terms:
(a) be issued in a Stated Amount which
(i) is at least $10,000;
(ii) does not exceed (or would not exceed) the then Letter of
Credit Availability;
(b) be stated to expire on a date (its "Stated Expiry Date") no later
than the earlier (i) of one year from its date of issuance and (ii) the
Commitment Termination Date; and
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(c) on or prior to its Stated Expiry Date
(i) terminate immediately upon notice to the Lender from the
beneficiary thereunder that all obligations covered thereby have been
terminated, paid, or otherwise satisfied in full,
(ii) reduce in part immediately and to the extent the beneficiary
thereunder has notified the Lender that the obligations covered
thereby have been paid or otherwise satisfied in part, or
(iii) terminate 30 Business Days after notice to the beneficiary
thereunder from the Lender that an Event of Default has occurred and
is continuing.
So long as no Default has occurred and is continuing, by delivery to the Lender
of an Issuance Request at least three but not more than ten Business Days prior
to the Stated Expiry Date of any Letter of Credit, the Borrowers may request the
Lender to extend the Stated Expiry Date of such Letter of Credit for an
additional period not to exceed the earlier of one year from its date of
extension and the Commitment Termination Date.
SECTION 4.2. ISSUANCES AND EXTENSIONS. On the terms and subject to the
conditions of this Agreement (including Article VI), the Lender shall issue
Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of
Credit, in accordance with the Issuance Requests made therefor. The Lender will
make available the original of each Letter of Credit which it issues in
accordance with the Issuance Request therefor to the beneficiary thereof and
will notify the beneficiary under any Letter of Credit of any extension of the
Stated Expiry Date thereof.
The Lender is under no obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Agency or
arbitrator shall by its terms purport to enjoin or restrain the Lender from
issuing such Letter of Credit, or any requirement of Applicable Law or any
request or directive (whether or not having the force of law) from any
Governmental Agency with jurisdiction over the Lender shall prohibit, or
request that the Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Lender with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Lender is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall impose upon the
Lender any unreimbursed loss, cost or expense which was not applicable on
the Effective Date and which the Lender in good faith deems material to it;
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(ii) one or more of the applicable conditions contained in Article VI
is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is prior to
the maturity date of any financial obligation to be supported by the
requested Letter of Credit;
(iv) any requested Letter of Credit does not provide for drafts, or is
not otherwise in form and substance acceptable to the Lender, or the
issuance of a Letter of Credit shall violate any applicable policies of the
Lender;
(v) any standby Letter of Credit is for the purpose of supporting the
issuance of any letter of credit by any other Person; or
(vi) such Letter of Credit is in a face amount denominated in a
currency other than Dollars.
The Uniform Customs and Practice for Documentary Credits as published by the
International Chamber of Commerce most recently at the time of issuance of any
Letter of Credit shall (unless otherwise expressly provided in the Letters of
Credit) apply to the Letters of Credit.
SECTION 4.3. DISBURSEMENTS. The Lender will notify the Borrowers promptly
of the presentment for payment of any Letter of Credit, together with notice of
the date (the "Disbursement Date") such payment shall be made. Subject to the
terms and provisions of such Letter of Credit, the Lender shall make such
payment to the beneficiary (or its designee) of such Letter of Credit. In
paying any drawing under a Letter of Credit, the Lender shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. Prior to 12:00 noon
(Chicago time) on the Disbursement Date, the Borrowers will reimburse the Lender
for all amounts which it has disbursed under the Letter of Credit. To the extent
the Lender is not reimbursed in full in accordance with the preceding sentence,
the Borrowers' Reimbursement Obligation shall accrue interest at a fluctuating
rate determined by reference to the Alternate Base Rate, plus a margin of 2% per
annum, payable on demand. In the event the Lender is not reimbursed by the
Borrowers on the Disbursement Date, or if the Lender must for any reason return
or disgorge such reimbursement, the Lender shall, on the terms and subject to
the conditions of this Agreement, fund the Reimbursement Obligation therefor by
making, on the next Business Day, Loans which are Base Rate Loans as provided in
Section 2.1.2 (the Borrowers being deemed to have given a timely Borrowing
Request therefor for such amount); provided, however, for the purpose of
determining the availability of the Commitments to make Loans immediately prior
to giving effect to the application of
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the proceeds of such Loans, such Reimbursement Obligation shall be deemed not to
be outstanding at such time.
SECTION 4.4. REIMBURSEMENT. The Borrowers' obligation (a "Reimbursement
Obligation") under Section 4.3 to reimburse the Lender with respect to each
Disbursement (including interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim, or
defense to payment which the Borrowers may have or have had against the Lender
or any beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient, the failure of any Disbursement to conform to the terms of the
applicable Letter of Credit (if, in the Lender's good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Disbursement, or the
legality, validity, form, regularity, or enforceability of such Letter of
Credit; provided, however, that nothing herein shall adversely affect the right
of the Borrowers to commence any proceeding against the Lender for any wrongful
Disbursement made by the Lender under a Letter of Credit as a result of acts or
omissions constituting gross negligence or wilful misconduct on the part of the
Lender.
SECTION 4.5. DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Event of Default or the occurrence of the Commitment
Termination Date, an amount equal to that portion of Letter of Credit
Outstandings attributable to outstanding and undrawn Letters of Credit shall, at
the election of the Lender, and without demand upon or notice to the Borrowers,
be deemed to have been paid or disbursed by the Lender under such Letters of
Credit (notwithstanding that such amount may not in fact have been so paid or
disbursed), and, upon notification by the Lender to the Borrowers of its
obligations under this Section, the Borrowers shall be immediately obligated to
reimburse the Lender the amount deemed to have been so paid or disbursed by the
Lender. Any amounts so received by the Lender from the Borrowers pursuant to
this Section shall be held as collateral security for the repayment of the
Borrowers' obligations in connection with the Letters of Credit issued by the
Lender. At any time when such Letters of Credit shall terminate and all
Obligations to the Lender are either terminated or paid or reimbursed to the
Lender in full, the Obligations of the Borrowers under this Section shall be
reduced accordingly (subject, however, to reinstatement in the event any payment
in respect of such Letters of Credit is recovered in any manner from the
Lender), and the Lender will return to the Borrowers the excess, if any, of
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(a) the aggregate amount deposited by the Borrowers with the Lender
and not theretofore applied by the Lender to any Reimbursement Obligation
over
(b) the aggregate amount of all Reimbursement Obligations to the
Lender pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or waived, the
Lender shall return to the Borrowers all amounts then on deposit with the Lender
pursuant to this Section. All amounts on deposit pursuant to this Section
shall, until their application to any Reimbursement Obligation or their return
to the Borrowers, as the case may be, bear interest at the daily average Federal
Funds Rate from time to time in effect (net of the costs of any reserve
requirements, in respect of amounts on deposit pursuant to this Section,
pursuant to F.R.S. Board Regulation D), which interest shall be held by the
Lender as additional collateral security for the repayment of the Borrowers'
Obligations in connection with the Letters of Credit issued by the Lender.
SECTION 4.6. NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrowers shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. The Lender (except to the extent of its own gross
negligence or wilful misconduct) shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile or
otherwise; or
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(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a Disbursement under a Letter of Credit
or of the proceeds thereof;
(f) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrowers in respect of
any Letter of Credit;
(g) the existence of any claim, set-off, defense or other right that
the Borrowers may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Lender or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the Letters of Credit or any unrelated
transaction;
(h) any payment by the Lender under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of any Letter of Credit; or any payment made by the Lender under
any Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any insolvency proceeding; and
(i) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrowers or a guarantor.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted the Lender hereunder. In furtherance and extension,
and not in limitation or derogation, of any of the foregoing, any action taken
or omitted to be taken by the Lender in good faith shall be binding upon the
Borrowers and shall not put the Lender under any resulting liability to the
Borrowers.
SECTION 4.7. INCREASED COSTS; INDEMNITY. If by reason of
(a) any change in Applicable Law or any change in the interpretation
or application by any judicial or regulatory authority of any Applicable
Law, or
(b) compliance by the Lender with any direction, request or
requirement (whether or not having the force of law) of any Governmental
Agency, including Regulation D of the F.R.S. Board:
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(i) the Lender shall be subject to any tax (other than taxes on
net income and franchises), levy, charge or withholding of any nature
or to any variation thereof or to any penalty with respect to the
maintenance or fulfillment of its obligations under this Article IV,
whether directly or by such being imposed on or suffered by the
Lender;
(ii) any reserve, deposit or similar requirement is or shall be
applicable, increased, imposed or modified in respect of any Letters
of Credit issued by the Lender; or
(iii) there shall be imposed on the Lender any other condition
regarding this Article IV or any Letter of Credit,
and the result of the foregoing is directly or indirectly to increase the cost
to the Lender of issuing or maintaining any Letter of Credit or to reduce any
amount receivable in respect thereof by the Lender, then and in any such case
may, at any time after the additional cost is incurred or the amount received is
reduced, notify the Borrowers thereof, and the Borrowers shall pay on demand
such amounts as the Lender may specify to be necessary to compensate the Lender
for such additional cost or reduced receipt, together with interest on such
amount from the date demanded until payment in full thereof at a rate equal at
all times to the Alternate Base Rate plus the Applicable Margin plus 2% per
annum. The determination by the Lender, as the case may be, of any amount due
pursuant to this Section, as set forth in a statement setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
error, be final and conclusive and binding on all of the parties hereto.
In addition to amounts payable as elsewhere provided in this Article IV,
the Borrowers hereby indemnify, exonerate and hold the Lender harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether the Lender is a party to the action for which indemnification is
sought), including reasonable attorneys' fees and disbursements, which the
Lender may incur or be subject to as a consequence, direct or indirect, of
(c) the issuance of the Letters of Credit, other than as a result of
the gross negligence or wilful misconduct of the Lender as determined by a
court of competent jurisdiction, or
(d) the failure of the Lender to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or governmental
authority.
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ARTICLE V.
CERTAIN INTEREST RATE AND OTHER PROVISIONS
SECTION 5.1. LIBO RATE LENDING UNLAWFUL. If the Lender shall determine
(which determination shall, upon notice thereof to the Borrowers, be conclusive
and binding on the Borrowers) that the introduction of or any change in or in
the interpretation of any Applicable Law makes it unlawful, or any central bank
or other Governmental Agency asserts that it is unlawful, for the Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligation of the Lender to make, continue, maintain or convert into
any such LIBO Rate Loans shall, upon such determination, forthwith be suspended
until the Lender shall notify the Borrowers that the circumstances causing such
suspension no longer exist, and all LIBO Rate Loans shall automatically convert
into Base Rate Loans at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
SECTION 5.2. DEPOSITS UNAVAILABLE. If the Lender shall have determined
that Dollar deposits in the relevant amount are not available to the Lender in
its relevant market, then, upon notice from the Lender to the Borrowers, the
obligations of the Lender under Section 2.3 to make any Loans shall forthwith be
suspended until the Lender shall notify the Borrowers that the circumstances
causing such suspension no longer exist.
SECTION 5.3. INCREASED LOAN COSTS, ETC. If by reason of
(a) any change in Applicable Law or any change in the interpretation
or application by any judicial or regulatory authority of any Applicable
Law, or
(b) compliance by the Lender with any direction, request or
requirement (whether or not having the force of law) of any Governmental
Agency, including Regulation D of the F.R.S. Board:
(i) the Lender shall be subject to any tax (other than taxes on
net income and franchises), levy, charge or withholding of any nature
or to any variation thereof or to any penalty with respect to any
payment due under any LIBO Rate Loan or other amounts due under this
Agreement, whether directly or by such being imposed on or suffered by
the Lender;
(ii) any reserve, deposit or similar requirement is or shall be
applicable, increased, imposed or modified in respect of any
extensions of credit or other assets of, or any deposits with or other
liabilities of, the Lender or Loans made by the Lender, or against any
other funds,
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obligations or other property owned or held by the Lender and the
Lender actually incurs such additional costs; or
(iii) there shall be imposed on the Lender any other condition
affecting this Agreement (or any of such extensions of credit or
liabilities),
and the result of the foregoing is directly or indirectly to increase the cost
to the Lender of making, continuing or maintaining (or of its obligation to
make, continue or maintain) any Loans as, or of converting (or of its obligation
to convert) any Loans into, LIBO Rate Loans, or to reduce any amount receivable
in respect thereof by the Lender, then and in any such case the Lender may, at
any time after the additional cost is incurred or the amount received is
reduced, notify the Borrowers thereof, and the Borrowers shall pay on demand
such amounts as the Lender may specify to be necessary to compensate the Lender
for such additional cost or reduced receipt, together with interest on such
amount from the date demanded until payment in full thereof at a rate equal at
all times to the Alternate Base Rate plus 3% per annum. The determination by
the Lender of any amount due pursuant to this Section, as set forth in a
statement setting forth the calculation thereof in reasonable detail, shall, in
the absence of manifest error, be final and conclusive and binding on all of the
parties hereto.
SECTION 5.4. FUNDING LOSSES. In the event the Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by the Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Section 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor by reason of any act or omission by the
Borrowers or failure of a condition precedent to be satisfied;
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor by
reason of any act or omission by the Borrowers; or
(d) any repayment or prepayment of the principal amount of any Loans
on a date other than the scheduled Monthly Payment Dates;
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then, upon the written notice of the Lender to the Borrowers, the Borrowers
shall, within five days of its receipt thereof, pay to the Lender such amount as
will (in the reasonable determination of the Lender) reimburse the Lender for
such loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrowers.
SECTION 5.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any Applicable Law of any Governmental Agency affects or would
affect the amount of capital required or expected to be maintained by the Lender
or any Person controlling the Lender, and the Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitments, issuance of Letters of Credit or
the Loans made by the Lender is reduced to a level below that which the Lender
or such controlling Person could have achieved but for the occurrence of any
such circumstance, then, in any such case upon notice from time to time by the
Lender to the Borrowers, the Borrowers shall immediately pay directly to the
Lender additional amounts sufficient to compensate the Lender or such
controlling Person for such reduction in rate of return. A statement of the
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrowers. In determining such amount, the Lender
may use any method of averaging and attribution that it (in its reasonable
discretion) shall deem applicable.
SECTION 5.6. TAXES. All payments by the Borrowers of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, levies, assessments, imports,
deductions, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes and taxes imposed
on or measured by the Lender's net income or receipts (such non-excluded items
being called "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrowers hereunder is required in respect of any
Taxes pursuant to any Applicable Law, then the Borrowers will
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Lender an official receipt or other
documentation satisfactory to the Lender evidencing such payment to such
authority; and
(c) pay to the Lender such additional amount or amounts as is
necessary to ensure that the net amount actually received by the Lender
will
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equal the full amount the Lender would have received and retained had no
such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Lender with respect to
any payment received by the Lender hereunder, the Lender may pay such Taxes and
the Borrowers will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had not such Taxes been asserted.
If the Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fail to remit to the Lender the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Lender for any
incremental Taxes, interest or penalties that may become payable by the Lender
as a result of any such failure.
SECTION 5.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrowers pursuant to this Agreement, the Note or
any other Loan Document shall be made by the Borrowers without setoff, deduction
or counterclaim, not later than 11:00 a.m. (Chicago time) on the date due, in
same day or immediately available funds, to such account with the Lender in
Chicago, Illinois as the Lender shall specify from time to time by notice to the
Borrowers. Funds received after that time shall be deemed to have been received
by the Lender on the next succeeding Business Day and any applicable interest or
fee shall continue to accrue. All interest shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest is payable over a year
comprised of 360 days (or, in the case of interest on a Base Rate Loan (other
than when calculated with respect to the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans) be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION 5.8. SETOFF. The Lender shall, upon the occurrence of any Default
described in clauses (a) through (d) of Section 9.1.9 or upon the occurrence of
any other Event of Default, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) the Borrowers hereby grant to the Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of the Borrowers then or thereafter maintained with or
otherwise held by the Lender, including without limitation, the Proceeds
Account. The Lender agrees promptly to notify the
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Borrowers after any such setoff and application made by the Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Lender under this Section 5.8 are
in addition to other rights and remedies (including other rights of setoff under
Applicable Law or otherwise) which the Lender may have.
SECTION 5.9. USE OF PROCEEDS. The Borrowers shall apply the proceeds of
each Borrowing in accordance with the fourth recital; without limiting the
foregoing, no proceeds of any Loan will be used to acquire any equity security
of a class which is registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or any "margin stock", as defined in F.R.S. Board Regulation U, X or
G.
ARTICLE VI.
CONDITIONS PRECEDENT
SECTION 6.1. EFFECTIVENESS OF AGREEMENT AND INITIAL BORROWING. The
Tranche A and Tranche B Loans outstanding under the Existing Agreement will, on
the Effective Date, be consolidated into a new Tranche A. The obligation of the
Lender to (i) make the initial Loans (i.e. under Tranche A or Tranche B); (ii)
consolidate the outstanding Tranche A and Tranche B Loans into a new Tranche A;
(iii) make any new Loans and (iv) to amend and restate the Existing Agreement
shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 6.1.
SECTION 6.1.1. RESOLUTIONS, ETC. The Lender shall have received from each
Borrower, LRI, Alliance Group, Alliance Plc, ENPRO and any other Obligor a
certificate, dated the date of the initial Borrowing, of the Secretary or
Assistant Secretary of such Obligor as to
(a) resolutions of the Board of Directors of such Obligor then in full
force and effect authorizing the execution, delivery and performance of
this Agreement, the Note and each other Loan Document, as applicable, to be
executed by it;
(b) the incumbency and signatures of those of its officers or Persons
authorized to act with respect to this Agreement, the Note and each other
Loan Document, as applicable, executed by it;
(c) the Organic Documents of such Obligor; and
(d) evidence that such Obligor is in good standing under the
Applicable Laws of the jurisdiction of its organization and, as to Alliance
USA,
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Source, LPC and New GOC, each of the jurisdictions where the Mortgaged
Properties are located,
upon which certificate the Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.
SECTION 6.1.2. DELIVERY OF NOTE. The Lender shall have received the Note
duly executed and delivered by the Borrowers.
SECTION 6.1.3. ENVIRONMENTAL REPORT. The Lender shall have received the
environmental assessments, acceptable in all respects to the Lender, prepared by
Southern Environmental Company with respect to the Mortgaged Properties owned by
Alliance USA and Source, a completed environmental questionnaire and such other
information with respect to the ownership and past use of the Mortgaged
Properties owned by Alliance USA and Source as the Lender may reasonably
request, all of which shall be satisfactory in form, substance and scope to the
Lender, and such reports, if not addressed to the Lender, shall be accompanied
by reliance letters addressed to the Lender in form and substance reasonably
satisfactory to the Lender.
SECTION 6.1.4. GUARANTIES. The Lender shall have received executed
counterparts of the Guaranties, dated as of the date hereof, duly executed by
each of Alliance Plc, Alliance Group, LRI and Enpro.
SECTION 6.1.5. PLEDGE AGREEMENTS. The Lender shall have received executed
counterparts of Pledge Agreements, dated as of the date hereof, duly executed by
(i) LRI pledging its interests in the capital stock in each of the Original
Borrowers and Enpro, (ii) Alliance Plc pledging its interest in the capital
stock of Alliance Group, Manx and LRI, and (iii) Alliance Group pledging its
interest in the capital stock of Alliance USA, ARNO, ARCOL and Source, together
with the certificates, evidencing all of the issued and outstanding shares of
capital stock pledged pursuant to the Pledge Agreements, which certificates
shall in each case be accompanied by undated stock powers duly executed in blank
and the evidence of completion (or satisfactory arrangement for the completion)
of all filings and recordings of the Pledge Agreements as may be necessary, or
in the reasonable opinion of the Lender, desirable, effectively to create a
valid, perfected first priority lien against and security interest in the
collateral covered thereby.
SECTION 6.1.6. MORTGAGES. The Lender shall have received counterparts of
the Mortgages, dated as of the date hereof, duly executed by Alliance USA,
Source, LPC and New GOC, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of the Mortgages as may be
necessary
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or, in the reasonable opinion of the Lender, desirable effectively to
create a valid, perfected first priority Lien against the Properties
purported to be covered thereby;
(b) favorable mortgagee's title opinions in favor of the Lender (in
form and substance and issued by title counsel satisfactory to the Lender),
with respect to the Property purporting to be covered by the Mortgages (or
such portion of such Properties as shall be acceptable to the Lender),
setting forth the working interest and net revenue interest of LPC and New
GOC in such Properties and opining that LPC's and New GOC's title to such
property is good and defensible and valid and that the interests created by
the Mortgages constitute valid first Liens thereon free and clear of all
defects and encumbrances other than as approved by the Lender; and
(c) such other approvals, opinions, or documents as the Lender may
reasonably request.
The Hydrocarbon Interests, Properties and interests described in and
secured by the Mortgages and in any other mortgages or supplemental mortgages
given pursuant to this Agreement, as such Properties and interests are from time
to time constituted, are herein collectively called the "Mortgaged Properties."
SECTION 6.1.7. OPINIONS OF COUNSEL. The Lender shall have received
opinions addressed to the Lender, from
(a) counsel to the Borrowers and Guarantors acceptable to the Lender,
substantially in the form of Exhibit H-2 hereto and dated as of the date
hereof;
(b) Pray, Walker, Jackman, Williamson & Marlar, as to the Mortgaged
Properties now owned by New GOC and listed in Part A of Schedule V-1 and
those Mortgaged Properties now owned by LPC and listed in Part B of
Schedule V-1; and Sinex & Stephenson, L.L.C., as to the Mortgaged
Properties listed in Part C of Schedule V-1, special title counsel to the
Borrowers, substantially in the forms of Exhibit I-1 hereto dated the date
of the initial Borrowing; and
(c) Schully, Roberts, Slattery & Jaubert, as to the Mortgaged
Properties listed on Schedule V-2 now owned by Alliance USA and Source
located in Louisiana, in each case substantially in form of Exhibit I-3
hereto and dated as of the date hereof.
SECTION 6.1.8. UCC-11S. The Lender shall have received certified copies
of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or
a
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similar search report certified by a party acceptable to the Lender, dated a
date reasonably near to the Effective Date, listing all effective financing
statements which name the Borrowers, LRI, Alliance Plc, Alliance Group and
Enpro, (under their present names and any previous names) as the debtor and
which are filed in the jurisdictions in the following states: (1) Oklahoma and
Texas with respect to LRI, Enpro, New GOC and GOCA, (2) Alabama, Arkansas,
Colorado, Kansas, Louisiana, Michigan, Mississippi, Montana, North Dakota, New
Mexico, Oklahoma, South Dakota, Texas and Wyoming with respect to LPC, and (3)
Louisiana and Delaware, with respect to Alliance Plc, Alliance Group, Source and
Alliance USA, in which jurisdictions filings are to be made pursuant to clause
(a) of Section 6.1.6, together with copies of such financing statements (none of
which shall cover any collateral described in the Mortgages).
SECTION 6.1.9. EVIDENCE OF INSURANCE. The Lender shall have received
certificates of insurance satisfactory to it evidencing the existence of all
insurance required to be maintained by the Borrowers by this Agreement and the
other Loan Documents.
SECTION 6.1.10. ASSIGNMENT OF OVERRIDING ROYALTY INTEREST IN EXCHANGE FOR
WARRANT DOCUMENTS. In exchange for the execution and delivery of the
Reassignment in exchange for Warrant Documents, the Lender shall have received
the Warrant Documents, in each case executed and delivered by Alliance Plc.
SECTION 6.1.11. UNDERTAKING. The Lender shall have received from Alliance
USA a duly executed, original counterpart of the Undertaking.
SECTION 6.1.12. ENGINEERING REPORT. The Lender shall have received
Engineering Report, from Lee Keeling and Associates, Inc. effective as of April
1, 1996, as to the Mortgaged Properties owned by LPC and New GOC, and an
Engineering Report from Ryder-Scott & Company, Inc., effective as of April 1,
1996, as to the Mortgaged Properties owned by Alliance USA.
SECTION 6.1.13. BUSINESS PLAN. The Lender shall have received the Initial
Business Plan, in form, scope and detail reasonably satisfactory to the Lender.
SECTION 6.1.14. DISPOSITION OF OTHER SUBSIDIARIES. LRI shall have sold or
otherwise disposed of all of its direct or indirect equity interests in Wexford
Technology, Incorporated, Imperial Petroleum, Inc., LaTex Resources
International, Inc., Phoenix Metals, Inc. and Ridgepointe Mining Company.
SECTION 6.1.15. HEDGING AGREEMENTS. LPC shall have entered into (and
shall have delivered to the Lender copies of) each of the Hedging Agreements
required by Sections 8.1.8 and Section 8.1.9.
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SECTION 6.1.16. CLOSING OF MERGER, ETC. The Lender shall have received
and approved a true, correct and complete copy of the fully executed Merger
Agreement, including all amendments and supplements thereto, a certificate of
merger shall have been filed with the Secretary of State of Delaware, and the
closing of the Merger shall have occurred such that Alliance Newco shall have
merged with and into LRI as contemplated by the Merger Agreement.
SECTION 6.1.17. [Not used.].
SECTION 6.1.18. AMENDED AND RESTATED SECURITY DOCUMENTS. The documents,
instruments and agreements comprising or evidencing the collateral security for
the Existing Agreement shall each have been amended and restated to provide that
such documents, instruments and agreements secure the Obligations, in each case
pursuant to instruments in form and substance satisfactory to the Lender and its
counsel.
SECTION 6.1.19. MANAGEMENT AGREEMENT. The Lender shall have received from
Alliance Plc, LRI, LPC, New GOC and the Alliance US Subsidiaries a duly
executed, original counterpart of the Management Agreement.
SECTION 6.1.20. SECURITY AGREEMENTS. The Lender shall have received from
the Borrowers, Alliance Plc, Alliance Group, LRI and Enpro duly executed,
original counterpart of Security Agreements, dated as of the date hereof,
together with the evidence of completion (or satisfactory arrangement for the
completion) of all filings and recordings of the Security Agreements as may be
necessary, or in the reasonable opinion of the Lender, desirable, effectively to
create a valid, perfected first priority liens against and security interests in
the collateral covered thereby.
SECTION 6.1.21. CLOSING FEES, EXPENSES, ETC. The Lender shall have
received all reasonable costs and expenses due and payable pursuant to Sections
3.3 and 10.3, if then invoiced.
SECTION 6.1.22. TITLE REPORTS. The Lender shall have received title
reports with respect to the Mortgaged Properties owned by Alliance USA and
Source in form, scope and detail reasonably satisfactory to the Lender.
SECTION 6.1.23. NEW SECTION 2.10 OF MORTGAGE. Section 2.10 of each
Mortgage is deleted and a new Section 2.10 in the form shown in Exhibit E-2
hereto is inserted in its place.
SECTION 6.2. ALL CREDIT EXTENSIONS. The obligation of the Lender to make
any Credit Extension shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 6.2.
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SECTION 6.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 9.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Borrowing) the following statements shall be
true and correct
(a) the representations and warranties set forth in Article VII
(excluding, however, those contained in Section 7.9) shall be true and
correct with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date);
(b) except as disclosed by the Borrowers to the Lender pursuant to
Section 7.9
(i) no labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of
the Borrowers, threatened against the Borrowers which has or might
reasonably be expected to have a Material Adverse Effect; and
(ii) no development shall have occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to Section 7.9 which has or might reasonably be
expected to have a Material Adverse Effect; and
(c) no Default shall have then occurred and be continuing, and neither
the Borrowers nor any other Obligor are in material violation of any
Applicable Law or governmental regulation or court order or decree if such
violation has or might reasonably be expected to have a Material Adverse
Effect.
SECTION 6.2.2. BORROWING REQUEST, ETC. The Lender shall have received a
Borrowing Request or Issuance Request, as the case may be, for such Credit
Extension. Each of the delivery of a Borrowing Request or an Issuance Request
and the acceptance by the Borrowers of the proceeds of the Borrowing or the
issuance of the Letter of Credit as applicable, shall constitute a
representation and warranty by the Borrowers that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the issuance of the Letter of Credit, as
applicable, the statements made in Section 6.2.1 are true and correct.
SECTION 6.2.3. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrowers shall be reasonably
satisfactory in form and substance to the Lender and its counsel; the Lender and
its
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counsel shall have received all information, approvals, opinions, documents
or instruments as the Lender or its counsel may reasonably request.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make
Loans and to issue Letters of Credit hereunder, the Borrowers represent and
warrant unto the Lender as set forth in this Article VII.
SECTION 7.1. ORGANIZATION, ETC. LPC is an Oklahoma corporation, GOCA is a
Delaware corporation, New GOC is a Delaware corporation, GOC was a Texas
corporation, Alliance USA is a Delaware corporation, Source is a Delaware
corporation, Alliance Group is a Louisiana corporation, LRI is a Delaware
corporation and Alliance Plc is a public limited company incorporated in England
and Wales, and each is validly organized and existing and in good standing under
the Applicable Laws of the jurisdiction of its organization, is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification, and
has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Agreement, the Note and each other Loan Document to which it is a party and to
own and hold under lease its property and to conduct its business substantially
as currently conducted by it. Except as set forth on the Disclosure Schedule,
the Borrowers have no Subsidiaries. LRI has sold or otherwise disposed of all
of its direct or indirect equity interests in the corporations listed in Section
6.1.14.
SECTION 7.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrowers and each other Obligor of this
Agreement, the Note and each other Loan Document executed or to be executed by
it or them are within each Borrower's and each such Obligor's respective
corporate powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene such Borrower's or such other Obligor's Organic
Documents;
(b) contravene or result in any violation of or default under any
Applicable Law or any material contractual restriction, court decree or
order, in each case binding on or affecting any Borrower or any other
Obligor or any Properties, businesses, assets or revenues of any Borrower;
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(c) result in, or require the creation or imposition of, any Lien on
(except for the Liens of the Loan Documents) any of the Borrowers' or any
other Obligor's Properties, businesses, assets or revenues.
SECTION 7.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Agency or other Person is required for the due execution, delivery or
performance by the Borrowers or any other Obligor of this Agreement, the Note or
any other Loan Document to which they are a party, except for Approvals, if any,
by the lessor under any government-issued oil and gas lease of the granting the
Mortgage, which Alliance USA, Source, LPC and New GOC expect to obtain in the
ordinary course of business and the Consents, each of which shall have been
obtained on or before the Effective Date.
SECTION 7.4. INVESTMENT COMPANY ACT. None of the Borrowers or any of
their Affiliates is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 7.5. PUBLIC UTILITY HOLDING COMPANY ACT. None the Borrowers is a
"holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 7.6. VALIDITY, ETC. This Agreement constitutes, and the Note and
each other Loan Document executed by the Borrowers will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrowers enforceable in accordance with their respective terms, and each
Loan Document executed pursuant hereto by each other Obligor will, on the due
execution and delivery thereof by such, Obligor, be the legal valid and binding
obligation of such Obligor enforceable in accordance with its terms, in each
case subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
SECTION 7.7. FINANCIAL INFORMATION.
(a) The audited consolidated balance sheet of LRI as at July 31, 1996
and the related audited statements of operations and cash flow of LRI, the
unaudited consolidated balance sheet of LRI as of January 31, 1997, copies
of which have been furnished to the Lender, have been prepared in
accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the corporations covered thereby as at
the date thereof and the results of their audited operations for the period
then ended.
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(b) The audited consolidated balance sheets of Alliance Plc as at
April 30, 1996 and the related audited statements of operations and cash
flow of Alliance Plc, the unaudited consolidated balance sheet of Alliance
Plc as of October 31, 1996, copies of which have been furnished to the
Lender, have been prepared in accordance with United Kingdom GAAP
consistently applied, and present fairly the consolidated financial
condition of the corporations covered thereby as at the date thereof and
the results of their audited operations for the period then ended.
SECTION 7.8. NO MATERIAL ADVERSE CHANGE. Since the date of the audited
financial statements described in Section 7.7, there has been no change in the
financial condition, operations, assets, business, Properties or prospects of
Alliance Plc, Alliance Group, LRI, Enpro or the Borrowers that has or might
reasonably be expected to have a Material Adverse Effect, except as disclosed in
Item 7.8A of the Disclosure Schedule.
SECTION 7.9. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending
or, to the knowledge of the Borrowers, threatened litigation, action,
proceeding, or labor controversy affecting the Borrowers, or any of their
Properties, businesses, assets or revenues, which has or might reasonably be
expected to have a Material Adverse Effect, except as disclosed in Item 7.9
("Litigation") of the Disclosure Schedule.
SECTION 7.10. OWNERSHIP OF PROPERTIES. Each of the Borrowers have good
and defensible title to their Properties (the Oil and Gas Properties of Source
and Alliance USA are listed in Item 7.10 of the Disclosure Schedule) (including,
without limitation, all Hydrocarbon Interests), free and clear of all Liens
except (a) those referred to in the financial statements referred to in Section
7.7, (b) as disclosed to the Lender in the Disclosure Schedule or (c) as
permitted by Section 8.2.3. After giving full effect to all Liens permitted
under Section 8.2.3, each of the Borrowers owns the net interests in
Hydrocarbons produced from the Oil and Gas Properties as reflected in the most
recent Engineering Report, and none of the Borrowers are obligated to bear costs
or expenses in respect of the Oil and Gas Properties in excess of their
respective working interest percentage as reflected in the most recent
Engineering Report.
SECTION 7.11. TAXES. Each of the Borrowers has filed all Federal and
other tax returns and reports required by Applicable Law to have been filed by
it and has paid all taxes, assessments, fees and other governmental charges
thereby shown to be owing, except as disclosed in Item 7.11 of the Disclosure
Schedule and except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
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SECTION 7.12. PENSION AND WELFARE PLANS. During the twelve-consecutive-
month period prior to the Effective Date and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by the Borrowers or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 7.12
("Employee Benefit Plans") of the Disclosure Schedule, neither the Borrowers nor
any member of the Controlled Group has any contingent liability with respect to
any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 7.13. COMPLIANCE WITH LAW. None of the Borrowers (a) is in
violation of any Applicable Law of, or the terms of any Approval, license or
permit issued by, any Governmental Agency; or (b) has failed to obtain any
license, permit, franchise or other governmental authorization necessary to
ownership of any of its properties or the conduct of its business (including
without limitation any such authorization from the Federal Energy Regulatory
Commission or any state conservation commission or similar body); which
violation or failure could reasonably be expected to have a Material Adverse
Effect.
SECTION 7.14. CLAIMS AND LIABILITIES. Except as disclosed to the Lender
in Item 7.14 ("Claims and Liabilities") in the Disclosure Schedule, none of the
Borrowers has accrued any liabilities under gas purchase contracts for gas not
taken, but for which it is liable to pay if not made up and which, if not paid,
would have a Material Adverse Effect. Except as disclosed to the Lender in Item
7.14 of the Disclosure Schedule, no claims exist against the Borrowers for gas
imbalances which claims if adversely determined would have a Material Adverse
Effect. No purchaser of product supplied by the Borrowers has any claim against
the Borrowers for product paid for, but for which delivery was not taken as and
when paid for, which claim if adversely determined would have a Material Adverse
Effect.
SECTION 7.15. NO PROHIBITION ON PERFECTION OF SECURITY DOCUMENTS. None of
the terms or provisions of any indenture, mortgage, deed of trust, agreement or
other instrument to which any Borrower is a party or by which any Borrower or
the property of any Borrower is bound prohibit the filing or recordation of any
of the Loan Documents or any other action which is necessary or appropriate in
connection with the perfection of the Liens evidenced and created by any of the
Loan Documents.
SECTION 7.16. SOLVENCY. None of the Borrowers is "insolvent", as such
term is used and defined in the United States Bankruptcy Code, 11 U.S.C. (S)
101, et seq.
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SECTION 7.17. ENVIRONMENTAL WARRANTIES. As a reasonable and prudent
operator of oil and gas producing properties, in the ordinary course of their
business, the Borrowers have conducted, with respect to their existing Oil and
Gas Properties, and, on an ongoing basis, conducts a review of the effect of
Environmental Laws on the business, operations and Properties of the Borrowers,
in the course of which they identify and evaluate associated liabilities and
costs (including any capital or operating expenditures required for Remedial
Action or other clean-up or closure of Properties presently owned or operated,
any capital or operating expenditures required for Remedial Action or otherwise
to achieve or maintain compliance with environmental protection standards
imposed by any Environmental Law or as a condition of any Approval, license,
permit or contract, any related constraints on operating activities, including
any periodic or permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat and any actual or
potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, the Borrowers have reasonably
concluded that, except as disclosed in Item 7.17 ("Environmental Matters") of
the Disclosure Schedule:
(a) all facilities and Property (including underlying groundwater)
owned, leased or operated by the Borrowers have been, and continue to be,
owned, leased or operated by the Borrowers in material compliance with all
Environmental Laws;
(b) there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or inquiries to, or requests for
information received by, the Borrowers with respect to any alleged
violation of any Environmental Law, that, singly or in the aggregate,
have or may reasonably be expected to have a Material Adverse Effect,
or
(ii) claims, complaints, notices or inquiries to, or requests for
information received by, the Borrowers regarding potential liability
under any Environmental Law or under any common law theories relating
to operations or the condition of any facilities or Property
(including underlying groundwater) owned, leased or operated by the
Borrowers that, singly or in the aggregate, have, or may reasonably be
expected to have a Material Adverse Effect;
(c) there have been no Releases of Hazardous Materials at, on or under
any Property now or previously owned or leased by GOC or the Borrowers
that, singly or in the aggregate, have, or may reasonably be expected to
have, a Material Adverse Effect;
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(d) the Borrowers have been issued and are in material compliance with
all permits, certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary or desirable for its
business;
(e) no Property now or previously owned, leased or operated by the
Borrowers is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, or, to the extent that such listing may, singly or in
the aggregate, have, or may reasonably be expected to have a Material
Adverse Effect, on the CERCLIS or on any other federal or state list of
sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any Property now or
previously owned, leased or operated by the Borrowers that, singly or in
the aggregate, have, or may reasonably be expected to have, a Material
Adverse Effect;
(g) None of the Borrowers has directly transported or directly
arranged for the transportation of any Hazardous Material to any location
which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, or, to the extent that such listing may, singly or in
the aggregate, have, or may reasonably be expected to have a Material
Adverse Effect, on the CERCLIS or on any federal or state list or which is
the subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrowers for
any remedial work, damage to natural resources or personal injury,
including claims under CERCLA;
(h) there are no polychlorinated biphenyls, radioactive materials or
friable asbestos present at any Property now or previously owned or leased
by the Borrowers that, singly or in the aggregate, have, or may reasonably
be expected to have, a Material Adverse Effect; and
(i) no condition exists at, on or under any property now or previously
owned or leased by the Borrowers which, with the passage of time, or the
giving of notice or both, would give rise to material liability under any
Environmental Law that, singly or in the aggregate have, or may reasonably
be expected to have a Material Adverse Effect.
SECTION 7.18. REGULATIONS G, U AND X. None of the Borrowers is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
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SECTION 7.19. ACCURACY OF INFORMATION. All factual information heretofore
or contemporaneously furnished by or on behalf of the Borrowers in writing to
the Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby (including without limitation each Engineering
Report) is, and all other such factual information hereafter furnished by or on
behalf of the Borrowers to the Lender will be, true and accurate in every
material respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the Lender,
and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not
misleading.
SECTION 7.20. TRADE PAYABLES AND INTERCOMPANY INDEBTEDNESS. To the best
of Borrowers' knowledge, (i) neither the Borrowers nor any other Obligor has any
trade payables other than those set forth on Schedule IV hereto and (ii) there
is no intercompany Indebtedness other than that set forth on Schedule III
hereto.
ARTICLE VIII.
COVENANTS
SECTION 8.1. AFFIRMATIVE COVENANTS. The Borrowers agree with the Lender
that, until all Commitments have terminated and all Obligations have been paid
and performed in full, the Borrowers will perform the obligations set forth in
this Section 8.1.
SECTION 8.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The
Borrowers will furnish, or will cause to be furnished, to the Lender copies of
the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 60 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year of Alliance
Plc, balance sheets of Alliance Plc and its consolidated Subsidiaries as of
the end of such Fiscal Quarter and statements of operations and cash flow
of Alliance Plc and its consolidated Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter, certified by the chief
financial Authorized Officer of Alliance Plc;
(b) as soon as available and in any event within 120 days after the
end of each Fiscal Year of Alliance Plc, a copy of the annual audit report
for such Fiscal Year for Alliance Plc and its consolidated Subsidiaries,
including therein the balance sheet of Alliance Plc and its consolidated
Subsidiaries as of the end of such Fiscal Year and statements of operations
and cash flow of
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Alliance Plc and its consolidated Subsidiaries for such Fiscal Year, in
each case certified (without any Impermissible Qualification) in a manner
reasonably acceptable to the Lender by an independent public accountant
acceptable to the Lender, together with a report from such accountants
containing a computation of, and showing compliance with, each of the
financial ratios and restrictions contained in Section 8.2.4 and to the
effect that, in making the examination necessary for the signing of such
annual report by such accountants, they have not become aware of any
Default that has occurred and is continuing, or, if they have become aware
of such Default, describing such Default and the steps, if any, being taken
to cure it;
(c) concurrently with the delivery of the financial statements
referred to is clauses (a) and (b), a certificate, executed by the chief
financial Authorized Officer of Alliance Plc, showing (in reasonable detail
and with appropriate calculations and computations in all respects
reasonably satisfactory to the Lender) compliance with the financial
covenants set forth in Section 8.2.4, showing, among other things, a
comparison between the actual results and the minimum requirements of this
Agreement;
(d) on or prior to March 1 of each calendar year, a budget for
Alliance Plc and its consolidated Subsidiaries for the following Fiscal
Year, in form, scope and detail reasonably satisfactory to the Lender,
showing, among other things, Approved CapEx Projects for such period;
(e) as soon as possible and in any event within three days after the
occurrence of each Default and any event which has or is reasonably likely
to have a Material Adverse Effect, a statement of the chief financial
Authorized Officer of the Borrowers setting forth details of such Default
or event and the action which Alliance Plc and the Borrowers have taken and
propose to take with respect thereto;
(f) as soon as possible and in any event within three days after (x)
the occurrence of any adverse development with respect to any litigation,
action, proceeding or labor controversy described in Section 7.9 or (y) the
commencement of any litigation, action, proceeding or labor controversy of
the type described in Section 7.9, notice thereof and copies of all
documentation relating thereto;
(g) as soon as possible and in any event within ten days after any
responsible officer of Alliance Plc or any Borrower has actual knowledge
thereof, notice of
(i) any claim by any Person against any Borrower of nonpayment
of, or
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(ii) any attempt by any Person to collect upon or enforce
any accounts payable of Alliance Plc or any if its consolidated
Subsidiaries, in the case of any single account payable in excess of
$50,000, or in the case of all accounts payable in the aggregate in excess
of $100,000;
(h) as soon as available and in any event within 60 days after each of
January 31st and July 31st of each calendar year, an Engineering Report,
with at least one report per year prepared by an independent, third-party
engineer satisfactory to the Lender;
(i) promptly after (i) the sending or filing thereof, copies of all
reports which Alliance Plc, Alliance Group or the Borrowers send to any of
their security holders, (ii) the sending or filing thereof, all reports and
registration statements which Alliance Plc, Alliance Group or the Borrowers
file with the Securities and Exchange Commission or any national securities
exchange, (iii) the filing thereof, copies of all tariff and rate cases and
other material reports filed with any regulatory authority (other than
routine operating reports), and (iv) receipt thereof, copies of all notices
received from any regulatory authority concerning noncompliance by any
Borrower with any Applicable Law;
(j) immediately upon becoming aware of the institution of any steps by
any Borrower or any other Person to terminate any Pension Plan, or the
failure to make a required contribution to any Pension Plan if such failure
is sufficient to give rise to a Lien under section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that such Borrower furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan which could result in the incurrence by such Borrower of
any material liability, fine or penalty, or any material increase in the
contingent liability of such Borrower with respect to any post-retirement
Welfare Plan benefit, notice thereof and copies of all documentation
relating thereto;
(k) upon, but in no event later than 10 days after, becoming aware of
(i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the
Borrowers or any of their Properties pursuant to any applicable
Environmental Laws, (ii) all other environmental claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Borrowers that could reasonably be
anticipated to cause such Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such
property under any Environmental Laws;
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(l) a monthly summary of Net Proceeds of Production, cash flow, Excess
Cash Flow, Excess Asset Cash Flow and Working Capital;
(m) such other information respecting the condition or operations,
financial or otherwise (including production volumes, revenues, operating
costs, drilling and completion reports and well-test data), of Alliance Plc
or any of its consolidated Subsidiaries as the Lender may from time to time
reasonably request.
SECTION 8.1.2. COMPLIANCE WITH LAWS, ETC. The Borrowers will comply in
all material respects with all Applicable Laws, such compliance to include
(without limitation):
(a) the maintenance and preservation of their corporate existence and
qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books.
SECTION 8.1.3. MAINTENANCE AND DEVELOPMENT OF PROPERTIES.
(a) The Borrowers will maintain, preserve, protect and keep their
Properties in good repair, working order and condition (ordinary wear and
tear excepted), and make necessary and proper repairs, renewals and
replacements so that their business carried on in connection therewith may
be properly conducted at all times in accordance with standard industry
practices. In particular, the Borrowers will operate or cause to be
operated their Oil and Gas Properties as reasonable and prudent operators.
(b) The Borrowers shall use their best efforts promptly to develop and
bring into production all proved developed non-producing reserves
identified in the Initial Business Plan and, after the two years covered in
the Initial Business Plan, those reserves used in the calculation of
Collateral Value. The Borrowers shall conduct Approved Development
Activities at a level such that their Capital Expenditures equal or exceed
$2,500,000 in each of the two years covered in the Initial Business Plan.
(c) LPC and New GOC shall, promptly after the Effective Date, take all
necessary actions and use their reasonable best efforts to obtain
appropriate Consents, if any, needed from each lessor under any government-
issued oil and
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gas lease of the granting of the Mortgage with respect to any such leases
covered by such instruments.
SECTION 8.1.4. INSURANCE. The Borrowers will maintain or cause to be
maintained with responsible insurance companies insurance with respect to their
properties and business against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses
(including, where appropriate, well control, operator's extra expense and
remediation insurance) and will furnish to the Lender at reasonable intervals a
certificate of Authorized Officers of the Borrowers setting forth the nature and
extent of all insurance maintained by the Borrowers in accordance with this
Section. The following shall apply to the insurance required by this Section
8.1.4:
(a) Each policy for property insurance covering the Mortgaged Property
shall show the Lender as loss payee;
(b) Each policy for liability insurance covering the Mortgaged
Property shall show the Lender as additional insured;
(c) Each insurance policy covering the Mortgaged Property shall
provide that at least thirty (30) days prior written notice of
cancellation, reduction in amount or other change in coverage, or of lapse
shall be given to the Lender by the insurer; and
(d) The Borrowers shall, if so requested by the Lender, deliver to the
Lender the original or a certified copy of each insurance policy covering
the Mortgaged Property.
SECTION 8.1.5. BOOKS AND RECORDS. The Borrowers will keep books and
records which accurately reflect all of their material business affairs and
transactions and permit the Lender or any of its respective representatives, at
reasonable times and intervals, to visit all of their offices, to discuss their
financial matters with their officers, directors and independent public
accountant (and each Borrower hereby authorizes such independent public
accountant to discuss such Borrower's financial matters with the Lender or its
representatives whether or not any representative of such Borrower is present)
and to examine (and, at the expense of such Borrower, photocopy extracts from)
any of its books or other corporate records. The Borrowers shall pay any
reasonable fees of such independent public accountant incurred in connection
with the Lender's exercise of its rights pursuant to this Section.
SECTION 8.1.6. ENVIRONMENTAL COVENANT. The Borrowers will
(a) use, operate and maintain all of their facilities and Properties
in material compliance with all Environmental Laws, keep all necessary
permits,
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approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws;
(b) (i) immediately notify the Lender and provide copies upon receipt
of all written claims, complaints, notices or inquiries relating to the
condition of their facilities and Properties or compliance with
Environmental Laws, (ii) use all reasonable efforts within ninety days to
have dismissed with prejudice any actions or proceedings relating to
compliance with Environmental Laws which would or could in the reasonable
opinion of the Lender have a Material Adverse Effect, and (iii) diligently
pursue cure of any material underlying environmental problem which forms
the basis of any such claim, complaint, notice or inquiry; and
(c) provide such information and certifications which the Lender may
reasonably request from time to time to evidence compliance with this
Section 8.1.6.
SECTION 8.1.7. FURTHER ASSURANCES. The Borrowers shall, upon the request
of the Lender, take such actions and execute and deliver such documents and
instruments as the Lender shall require to ensure that the Lender shall, at all
times, have received currently effective duly executed Loan Documents
encumbering Oil and Gas Properties of the Borrowers not included within the
Mortgaged Properties constituting the Proven Reserves of the Borrowers (with
accompanying letters in lieu of transfer orders) and satisfactory title evidence
in form and substance reasonably acceptable to the Lender in its reasonable
business judgment as to ownership of such Oil and Gas Properties. If the Lender
shall determine that, as of the date of any Collateral Value Redetermination,
the Borrowers shall have failed to comply with the preceding sentence, the
Lender may notify the Borrowers in writing of such failure and, within 30 days
from and after receipt of such written notice by the Borrowers, the Borrowers
shall execute and deliver to the Lender supplemental or additional Loan
Documents, in form and substance satisfactory to the Lender and its counsel,
securing payment of the Note and the other Obligations and covering additional
assets not then encumbered by any Loan Documents (together with current
valuations, Engineering Reports, and title evidence applicable to the additional
assets collaterally assigned, each of which shall be in form and substance
satisfactory to the Lender) such that the Lender shall have received currently
effective duly executed Loan Documents encumbering Oil and Gas Properties
constituting the Proven Reserves of the Borrowers (with accompanying letters in
lieu of transfer orders) and satisfactory title evidence in form and substance
acceptable to the Lender in its reasonable business judgment as to ownership of
such Oil and Gas Properties. The Borrowers shall ensure that all written
information, exhibits and reports furnished by or on behalf of the Borrowers to
the Lender do not and will not contain any untrue
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statement of a material fact and do not and will not omit to state any material
fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Lender and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgement or
recordation thereof.
If and to the extent Alliance Plc, Alliance Group, the Borrowers or any
other Obligor acquires any interest in all or any of the corporations listed in
Section 6.1.14, such interest shall be pledged to the Lender as additional
security for the Obligations, pursuant to Security Documents satisfactory to the
Lender.
SECTION 8.1.8. NATURAL GAS AND CRUDE OIL HEDGING. On or before July 1,
1997, LPC will enter into natural gas and crude oil Hedging Agreements
reasonably acceptable to the Lender that will enable Alliance USA, Source, LPC
and New GOC to obtain net realized prices of not less than (a) an agreed upon
amount per MMBtu of natural gas produced from its Hydrocarbon Interests on the
agreed upon aggregate notional volumes and (b) an agreed upon amount per barrel
of crude oil produced from its Hydrocarbon Interests on the agreed upon
aggregate notional volumes. Alliance USA, Source, GOCA and New GOC hereby
acknowledge that LPC is entering into such Hedging Agreements not only for its
own benefit, but also for the benefit of Alliance USA, Source, GOCA and New GOC.
Alliance USA, Source, GOCA and New GOC further acknowledge that LPC's
Obligations under the Hedging Agreements are Obligations of all the Borrowers as
if they were parties signatory thereto.
SECTION 8.1.9. INTEREST RATE PROTECTION. The Borrowers shall, within two
Business Days after delivery of the Borrowing Request for the initial Tranche B
Borrowing (as to the amounts requested in each such Borrowing related thereto),
enter into Hedging Agreements, in form and substance satisfactory to the Lender,
designed to protect the Borrowers against fluctuations in interest rates with
respect to the principal amount of all Loans and ensure a maximum agreed upon
interest rate on the notional amount projected by the Lender to be outstanding
under this Agreement through the Stated Maturity Date. Alliance USA, Source,
GOCA and New GOC hereby acknowledge that LPC is entering into such Hedging
Agreements not only for its own benefit, but also for the benefit of Alliance
USA, Source, GOCA and New GOC. Alliance USA, Source, GOCA and New GOC further
acknowledge that LPC's Obligations under the Hedging Agreements are Obligations
of all the Borrowers as if they were parties signatory thereto.
SECTION 8.1.10. BUSINESS PLAN. The Borrowers will furnish, or will cause
to be furnished, to the Lender by month 9 of year 2 of the Initial Business Plan
(and similarly, for each succeeding year) a business plan for the next calendar
year, in form, scope and detail reasonably satisfactory to the Lender.
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SECTION 8.1.11. EXCESS ASSET CASH FLOW. The Borrower will deposit,
immediately upon receipt, all Excess Asset Cash Flow into the Excess Asset Cash
Flow Account.
SECTION 8.1.12. TRADE PAYABLES AND INTERCOMPANY INDEBTEDNESS. No later
than July 15, 1997 the Borrowers will furnish to the Lender an updated Schedule
III and Schedule IV as to the intercompany Indebtedness and the trade payables
in existence on the May 1, 1997 certified by the Chief Financial Officer of
Alliance Plc.
SECTION 8.2. NEGATIVE COVENANTS. The Borrowers agree with the Lender
that, until all Commitments have terminated and all Obligations have been paid
and performed in full, the Borrowers will perform the obligations set forth in
this Section 8.2.
SECTION 8.2.1. BUSINESS ACTIVITIES. The Borrowers will not engage in any
business activity, except those described in the first recital and such
activities as may be incidental or related thereto.
SECTION 8.2.2. INDEBTEDNESS. Other than intercompany Indebtedness
existing on the Effective Date and set forth on Schedule III hereto, the
Borrowers will not create, incur, assume or suffer to exist or otherwise become
or be liable in respect of any Indebtedness, other than, without duplication,
the following:
(a) Indebtedness in respect of the Loans and other Obligations;
(b) Indebtedness in an aggregate principal amount not to exceed
$500,000 at any time outstanding which is incurred by the Borrowers to a
vendor of any assets to finance its or their acquisition of such assets;
(c) unsecured Indebtedness incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services, but excluding Indebtedness
incurred through the borrowing of money or Contingent Liabilities);
(d) existing Indebtedness to be paid in full no later than the date of
the initial Loans;
(e) Hedging Obligations incurred pursuant to the Hedging Agreements
approved by the Lender pursuant to Sections 8.1.8 and 8.1.9; and
(f) Contingent Obligations incurred to satisfy bonding requirements
imposed by any Governmental Agency not to exceed, in the aggregate,
$500,000;
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provided, however, that no Indebtedness otherwise permitted by clause (b) shall
be permitted if, after giving effect to the incurrence thereof, any Default
shall have occurred and be continuing; and, provided further, that it will not
constitute an Event of Default if any intercompany Indebtedness existing on the
Effective Date is not set forth on Schedule III hereto prior to July 15, 1997.
SECTION 8.2.3. LIENS. The Borrowers will not create, incur, assume or
suffer to exist any Lien upon any of their Property, revenues or assets, whether
now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted pursuant to any
Loan Document;
(b) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (b) of Section 8.2.2 and covering only
those assets acquired with the proceeds of such Indebtedness;
(c) Hydrocarbon production sales contracts;
(d) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books; provided, that at no time shall such sums exceed in the
aggregate $100,000;
(f) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(g) covenants, restrictions, easements, servitudes, permits,
conditions, exceptions, reservations, minor rights, minor encumbrances,
minor irregularities in title or conventional rights of reassignment prior
to abandonment which do not materially interfere with the occupation, use
and enjoyment by the Borrowers of their assets in the ordinary course of
business
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as presently conducted, or materially impair the value thereof for the
purpose of such business;
(h) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies; and
(i) Liens in favor of operators and non-operators under joint
operating agreements or similar contractual arrangements arising in the
ordinary course of the business of the Borrowers to secure amounts owing,
which amounts are not yet due or are being contested in good faith by
appropriate proceedings, if such reserve as may be required by GAAP shall
have been made therefor.
SECTION 8.2.4. FINANCIAL CONDITION. The Borrowers will not permit:
(a) the Current Ratio at any time to be less than (i) 0.35:1.0 during
the period commencing with the Effective Date and ending on April 30, 1998;
(ii) 0.80:1.00 between May 1, 1998 and April 30, 1999 and (iii) 1.10:1.0 at
any time after April 30, 1999; or
(b) Working Capital at any time after April 30, 1999 to be less than
$1.00.
The Borrowers shall not make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the Fiscal Year of
any Borrower.
SECTION 8.2.5. INVESTMENTS. The Borrowers will not make, incur, assume or
suffer to exist any Investment in any other Person, except:
(a) Cash Equivalent Investments;
(b) without duplication, Investments permitted as Indebtedness
pursuant to Section 8.2.2; and
(c) without duplication, Investments in the nature of Capital
Expenditures;
(d) if approved by the Lender in its sole discretion, Investments in
Wexford Technology Incorporated, Imperial Petroleum, Inc., LaTex Resources
International, Inc., Phoenix Metals, Inc. and Ridgepointe Mining Company,
each of which are former subsidiaries or LRI.
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provided, however, that
(e) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(f) no Investment otherwise permitted by clause (b), (c) or (d) shall
be permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.
SECTION 8.2.6. RESTRICTED PAYMENTS, ETC. On and at all times after the
Effective Date:
(a) the Borrowers will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any class of equity (now
or hereafter outstanding) of the Borrowers or on any options or other
rights with respect to any interest of any class of equity (now or
hereafter outstanding) of the Borrowers or apply any of its funds, property
or assets to the purchase, redemption, sinking fund or other retirement of,
any class of equity (now or hereafter outstanding) of the Borrowers, or
options or other rights with respect to any interest of or in any class of
equity (now or hereafter outstanding) of the Borrowers (such dividends,
distributions or applications being called "Distribution Payments") other
than Distribution Payments which do not cause the Borrowers to be in
violation of the Restricted Payment Tests; and
(b) the Borrowers will not make any deposit for any of the foregoing
purposes.
SECTION 8.2.7. RENTAL OBLIGATIONS. The Borrowers will not enter into at
any time any arrangement (excluding oil and gas leases entered into in the
ordinary course of business) which involves the leasing by the Borrowers from
any lessor of any real or personal property (or any interest therein), except
arrangements which, together with all other such arrangements which shall then
be in effect, will not require the payment of an aggregate amount of rentals by
the Borrowers in excess of (excluding escalations resulting from a rise in the
consumer price or similar index) $500,000 for any Fiscal Year or $1,000,000
during the full remaining term of such arrangements; provided, however, that any
calculation made for purposes of this Section shall exclude any amounts required
to be expended for maintenance and repairs, insurance, taxes, assessments, and
other similar charges.
SECTION 8.2.8. CONSOLIDATION, MERGER, ETC. The Borrowers will not
liquidate or dissolve, consolidate with, or merge into or with, any other
partnership or corporation, or purchase or otherwise acquire all or
substantially all of the assets of
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any Person (or of any division thereof). The Borrowers will not create any
Subsidiary except with the prior written consent of the Lender.
SECTION 8.2.9. ASSET DISPOSITIONS, ETC. The Borrowers will not sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, all or substantially all of the assets of the
Borrowers in any one transaction or in any series of transactions, whether or
not related; and the Borrowers will not sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
less than all or any substantial part of its assets (including accounts
receivable) to any Person other than (x) farmouts under standard industry terms
of Properties not holding Proven Reserves, (y) abandonment of Properties not
capable of producing Hydrocarbons in paying quantities after the expiration of
their primary terms or as permitted by Section 2.7 of the Mortgages and (z)
those sales approved by the Lender on the terms set forth on Schedule VI.
SECTION 8.2.10. MODIFICATION OF CERTAIN AGREEMENTS. LPC and New GOC will
not consent to any amendment, supplement or other modification of any of the
terms or provisions contained in, or applicable to, the Management Agreement nor
will Alliance Plc or LRI consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable to,
the Merger Agreement.
SECTION 8.2.11. TRANSACTIONS WITH AFFILIATES. No Borrower will enter
into, or cause, suffer or permit to exist any arrangement or contract with any
of its other Affiliates unless such arrangement or contract is fair and
equitable to such Borrower and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of such Borrower with
a Person which is not one of its Affiliates.
SECTION 8.2.12. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. No
Borrower will enter into any agreement (excluding this Agreement, any other Loan
Document and any agreement governing any Indebtedness permitted by clause (b) of
Section 8.2.2 as in effect on the Effective Date as to the assets financed with
the proceeds of such Indebtedness) prohibiting the creation or assumption of any
Lien upon its properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of such Borrower or any other Obligor to amend or
otherwise modify this Agreement or any other Loan Document.
SECTION 8.2.13. TAKE OR PAY CONTRACTS. No Borrower will enter into or be
a party to any arrangement for the purchase of materials, supplies, other
property (including without limitation Hydrocarbons), or services if such
arrangement requires that payment be made by such Borrower regardless of whether
such materials, supplies, other property, or services are delivered or furnished
to it.
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ARTICLE IX.
EVENTS OF DEFAULT
SECTION 9.1. LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1. NON-PAYMENT OF OBLIGATIONS. Any Borrower shall default in
the payment or prepayment when due of any principal of any Loan; or any Borrower
shall default (and such default shall continue unremedied for a period of five
days) in the payment when due of any interest on any Loan or any fee or of any
other Obligation.
SECTION 9.1.2. BREACH OF WARRANTY. Any representation or warranty of the
Borrowers or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrowers or any other Obligor to the Lender for the
purposes of or in connection with this Agreement or any such other Loan Document
(including any certificates delivered pursuant to Article VI) is or shall be
incorrect when made in any material respect.
SECTION 9.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. Any
Borrower shall default in the due performance and observance of any of its
obligations under Section 8.1 or 8.2.
SECTION 9.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of 15
days after notice thereof shall have been given to the Borrowers by the Lender.
SECTION 9.1.5. DEFAULT ON OTHER INDEBTEDNESS.
(a) A default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness (including any Hedging Agreements in effect between the
Borrowers and the Lender, but excluding Indebtedness described in Section
9.1.1 and trade payables in existence on the Effective Date as set forth on
Schedule IV hereto; provided, however, that it will not constitute an Event
of Default if any trade payables existing on the Effective Date are not set
forth on Schedule IV hereto prior to July 15, 1997) of the Borrowers or any
other Obligor having a principal amount, individually or in the aggregate,
in excess of $50,000, or a default shall occur in the performance or
observance of any obligation or condition with respect to such Indebtedness
if the effect of such
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default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time
sufficient to permit any holder of such Indebtedness, or any trustee or
agent for such holders, to cause such Indebtedness to become due and
payable prior to its expressed maturity; or
(b) Beginning 180 days from the Effective Date, a default shall occur
in the payment when due of any royalty, overriding royalty or similar
interest burdening the Oil and Gas Properties of any Borrower individually
or in the aggregate, in excess of $50,000.
SECTION 9.1.6. JUDGMENTS. Any judgment or order for the payment of money
in excess of $50,000 shall be rendered against any Borrower or any other Obligor
and either
(a) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION 9.1.7. PENSION PLANS. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by any Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, such Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 9.1.8. CONTROL OF THE BORROWERS. Any Change in Control shall
occur.
SECTION 9.1.9. BANKRUPTCY, INSOLVENCY, ETC. Any Borrower or any other
Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for such Borrower or any
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other Obligor or any property of any thereof, or make a general assignment
for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for such Borrower or any other Obligor or
for a substantial part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged within 60
days, provided that the Borrowers and each other Obligor hereby expressly
authorizes the Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend its
rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of any Borrower or any other Obligor, and, if any
such case or proceeding is not commenced by such Borrower or such other
Obligor, such case or proceeding shall be consented to or acquiesced in by
such Borrower or such other Obligor or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that
such Borrower and each other Obligor hereby expressly authorizes the Lender
to appear in any court conducting any such case or proceeding during such
60-day period to preserve, protect and defend its rights under the Loan
Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 9.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Borrower,
any other Obligor or any other party shall, directly or indirectly, contest in
any manner such effectiveness, validity, binding nature or enforceability; or
any Lien securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to those exceptions expressly
permitted by such Loan Document.
SECTION 9.2. ACTION IF BANKRUPTCY. If any Event of Default described in
clauses (a) through (d) of Section 9.1.9 shall occur with respect to any
Borrower or any other Obligor, the Commitments (if not theretofore terminated)
shall automatically terminate and the outstanding principal amount of all
outstanding Loans and all other Obligations shall automatically be and become
immediately due and payable, without notice or demand.
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SECTION 9.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of
Section 9.1.9 with respect to any Borrower or any other Obligor) shall occur for
any reason, whether voluntary or involuntary, and be continuing, the Lender, may
by notice to the Borrowers declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable and/or
the Commitments (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate.
SECTION 9.4. RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by Applicable Law or
in equity, or under any other instrument, document or agreement now existing or
hereafter arising.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. WAIVERS, AMENDMENTS, ETC.
(a) The provisions of this Agreement and of each other Loan Document
may from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Borrowers and
the Lender. No failure or delay on the part of the Lender in exercising
any power or right under this Agreement or any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand on
the Borrowers in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Lender under
this Agreement or any other Loan Document shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
(b) Unless and until the Merger is consummated and this Agreement
becomes effective, the terms and provisions of the Existing Agreement and
the other Loan Documents, including the Forbearance Agreement, are binding
in all respects against LRI, the Original Borrowers and all Obligors and
shall remain in full force and effect and are hereby ratified and confirmed
in all respects. Upon the consummation of the Merger and the satisfaction
of each
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of the other conditions precedent set forth in Article VI, this Agreement
will become effective and will be a binding and enforceable agreement
superseding the Existing Agreement in all respects.
(c) If the Merger is not consummated, or if each of the other
conditions set forth in Article VI are not satisfied by April 30, 1997,
then
(i) this Agreement is null and void and of no further force and
effect;
(ii) no Borrower or other Obligor shall have any claim of any
kind against the Lender hereunder;
(iii) the Existing Agreement and the Forbearance Agreement shall
be immediately and automatically reinstated on such date without any
further action required on the part of any of the parties hereto; and
(iv) the Borrowers and the Guarantors hereby waive, and release
the Lender and the Designee from, any and all claims against the
Lender and the Designee under this Agreement.
(d) Except as provided in the preceding Section 10.1(b) and 10.1(c),
this Agreement is an amendment and restatement of, and replaces and
supersedes the Existing Agreement; provided, however, that no right,
interest, claim or cause of action of any kind of the Lender which may have
existed under the Existing Agreement shall in any way be released,
modified, compromised or waived by virtue of this Existing Agreement
superseding and replacing the Existing Agreement.
SECTION 10.2. NOTICES.
(a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Borrowers by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
the signature pages, and (ii) shall be followed promptly by delivery of a
hard copy original thereof) and mailed, faxed or delivered, to the address
or facsimile number specified for notices on the signature pages hereof;
or, as directed to the Borrowers or the Lender, to such other address as
shall be designated by such party in a written notice to the other parties,
and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Borrowers and the
Lender.
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(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form
by facsimile machine, respectively, or if mailed, upon the third Business
Day after the date deposited into the U.S. mail, or if delivered, upon
delivery.
(c) Any agreement of the Lender herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of
the Borrowers. The Lender shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Borrowers to give
such notice and the Lender shall not have any liability to the Borrowers or
other Person on account of any action taken or not taken by the Lender in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrowers to repay the Loans shall not be affected in any way or to any
extent by any failure by the Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Lender of a
confirmation which is at variance with the terms understood by the Lender
to be contained in the telephonic or facsimile notice.
SECTION 10.3. PAYMENT OF COSTS AND EXPENSES. The Borrowers agree to pay
on demand all reasonable expenses of the Lender (including the fees and out-of-
pocket expenses of internal and external counsel to the Lender and of local
counsel, if any, who may be retained by counsel to the Lender) in connection
with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated,
(b) the filing, recording, refiling or rerecording of the Mortgage,
the Security Agreements, the Pledge Agreements and/or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements, and modifications to, and all releases and terminations of,
any thereof and any and all other documents or instruments of further
assurance required to be filed or recorded or refiled or rerecorded by the
terms hereof or of the Mortgage, the Security Agreements and the Pledge
Agreements, and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrowers further agree to pay, and to save the Lender harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Agreement, the borrowings hereunder, the
issuance of the Note,
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the issuance of the Letters of Credit, or any other Loan Documents. The
Borrowers also agree to reimburse the Lender upon demand for all reasonable out-
of-pocket expenses (including attorneys' fees and legal expenses of internal and
external attorneys) incurred by the Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION 10.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Commitments,
the Borrowers hereby indemnify, exonerate and hold the Lender and each of its
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) This Agreement, any Loan Document or any document contemplated
hereby or referred to herein;
(b) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, including the Merger
and any Approved Development Activities, or the use of any Letter of
Credit;
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Borrower of all or any portion
of the stock or assets of any Person, whether or not the Lender is party
thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to any
Environmental Law or the condition of any facility or Property owned,
leased or operated by any Borrower;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any facility
or Property owned, leased or operated by any Borrower thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, such Borrower;
or
(f) any misrepresentation, inaccuracy or breach in or of Section 7.17
or Section 8.1.6,
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except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrowers hereby agree to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under Applicable Law. The
obligations in this Section 10.4 shall survive payment of all other Obligations.
At the election of any Indemnified Party, the Borrowers shall defend such
Indemnified Party using legal counsel satisfactory to such Indemnified Party in
such Person's sole discretion, at the sole cost and expense of the Borrowers.
All amounts owing under this Section 10.4 shall be paid within 30 days after
demand.
SECTION 10.5. SURVIVAL. The obligations of the Borrowers under Sections
5.3, 5.4, 5.5, 5.6, 10.3 and 10.4 shall in each case survive any termination of
this Agreement, the payment in full of all Obligations and the termination of
all Commitments. The representations and warranties made by each Obligor in
this Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 10.6. SEVERABILITY. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7. HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be executed by the Borrowers and the Lender and be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof are
executed on behalf of the Borrowers and the Lender; provided, however, that such
effectiveness shall be contingent upon the consummation of the Merger and the
satisfaction of all of the conditions precedent set forth in Article VI. This
Agreement is made and entered into for the sole protection and legal benefit of
the Borrowers and the Lender and Persons indemnified hereunder, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
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SECTION 10.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE
AND EACH OTHER LOAN DOCUMENT (OTHER THAN THE MORTGAGES OR AS EXPRESSLY PROVIDED
IN ANY SUCH DOCUMENT) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This Agreement, the
Note and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrowers may not assign or transfer their rights or
obligations hereunder without the prior written consent of the Lender; and
(b) the rights of sale, assignment and transfer of the Lender are
subject to Section 10.11.
SECTION 10.11. SALE AND TRANSFER OF LOANS AND NOTE; PARTICIPATIONS IN
LOANS AND NOTE. The Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section 10.11.
SECTION 10.11.1. ASSIGNMENTS. The Lender may at any time assign and
delegate to one or more banks or other financial institutions (each Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of the Lender's total Loans and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the Lender's Loans and Commitments) in a minimum
aggregate amount of $1,000,000 (or the entire remaining amount of the Lender's
Loans and Commitments); provided, however, that the Lender is required at all
times to maintain Loans, Letter of Credit Outstandings and Commitments hereunder
in an aggregate amount of $1,000,000 (unless such Lender shall have reduced its
Loans, Letter of Credit Outstandings and Commitments to zero); provided,
further, however, that the Borrowers and each other Obligor shall be entitled to
continue to deal solely and directly with the Lender in connection with the
interests so assigned and delegated to an Assignee Lender until
(a) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrowers by the Lender
and such Assignee Lender,
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<PAGE>
(b) such Assignee Lender shall have executed and delivered to the
Borrowers and the Lender a Lender Assignment Notice, accepted by the
Lender, and
(c) the processing fees described below shall have been paid.
From and after the date that the Assignee Lender delivers such Lender Assignment
Notice, (x) the Assignee Lender thereunder shall be deemed automatically to have
become a party hereto and to the extent that rights and obligations hereunder
have been assigned and delegated to such Assignee Lender in connection with such
Lender Assignment Notice, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Notice, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Lender has
received an executed Lender Assignment Notice, the Borrowers shall execute and
deliver to the relevant Assignee Lender a new Note evidencing such Assignee
Lender's assigned Loans and Commitments and, if the assignor Lender has retained
Loans and Commitments hereunder, a replacement Note in the principal amount of
the Loans and Commitments retained by the assignor Lender hereunder (each such
Note to be in exchange for, but not in payment of, the corresponding Note then
held by such assignor Lender). The assignor Lender shall mark the predecessor
Note "exchanged" and deliver it to the Borrowers. Accrued interest on that part
of the predecessor Note evidenced by the new Notes, and accrued fees, shall be
paid as provided in the Lender Assignment Notice. Accrued interest on that part
of the predecessor Note evidenced by the replacement Notes shall be paid to the
assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Notes and in this Agreement. Such
assignor Lender or such Assignee Lender must also pay a processing fee to the
Lender upon delivery of any Lender Assignment Notice in the amount of $2,500.
Any attempted assignment and delegation not made in accordance with this Section
10.11.1 shall be null and void. Nothing contained in this Agreement shall
prohibit any Lender from pledging or assigning any Note to any Federal Reserve
Bank in accordance with Applicable Law.
SECTION 10.11.2. PARTICIPATIONS. The Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "Participant") participating interests in
any of the Loans, Commitments, or other interests of the Lender hereunder;
provided, however, that
(a) no participation contemplated in this Section 10.11 shall relieve
the Lender from its Commitments or its other obligations hereunder or under
any other Loan Document,
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(b) the Lender shall remain solely responsible for the performance of
its Commitments and such other obligations,
(c) the Borrowers and each other Obligor shall continue to deal solely
and directly with the Lender in connection with the Lender's rights and
obligations under this Agreement and each of the other Loan Documents, and
(d) the Borrowers shall not be required to pay any amount under
Section 4.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Borrowers acknowledge and agree that each Participant, for purposes of
Sections 5.3, 5.4, 5.5 and 5.6 (except as provided in Section 10.11.2(d)), 5.8,
10.3 and 10.4, shall be considered a Lender.
SECTION 10.12. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE
BORROWERS SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF ILLINOIS
OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. THE BORROWERS FURTHER IRREVOCABLY CONSENT
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE BORROWERS HEREBY EXPRESSLY
AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
THE BORROWERS HAVE OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWERS HEREBY IRREVOCABLY
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<PAGE>
WAIVE SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
SECTION 10.13. WAIVER OF JURY TRIAL. THE LENDER AND THE BORROWERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE LENDER OR THE BORROWERS. THE BORROWERS ACKNOWLEDGE AND AGREE
THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH THEY ARE A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.14. JOINT AND SEVERAL LIABILITY. Each Borrower has determined
that it is in its best interest and in pursuit of its legitimate business
purposes to induce the Lender to extend credit to the Borrowers pursuant to this
Agreement. Each Borrower acknowledges and represents that its business is
integrally related to the business of the other Borrowers, that the availability
of the Commitments to all of the Borrowers benefits each Borrower individually
and that the Loans made will be for and inure to the benefit of all of the
Borrowers individually and as a group. Accordingly, each Borrower shall be
jointly and severally liable (as a principal and not as a surety, guarantor or
other accommodation party) for each and every representation, warranty, covenant
and obligation to be performed by the Borrowers under this Agreement, the Notes
and the other Loan Documents, and each Borrower acknowledges that in extending
the credit provided herein the Lender is relying upon the fact that the
obligations of each Borrower hereunder are the joint and several obligations of
a principal. The invalidity, unenforceability or illegality of this Agreement,
the Note or any other Loan Document as to one Borrower or the release by the
Lender of a Borrower hereunder or thereunder shall not affect the obligations of
the other Borrowers under this Agreement, the Note or other Loan Documents, all
of which shall otherwise remain valid and legally binding obligations of the
other Borrowers.
SECTION 10.15. CERTAIN CONSENTS AND WAIVERS.
(a) The Lender may, at any time and from time to time, without the
consent of or notice to the Borrowers, except such notice as may be
required by applicable statute which cannot be waived, without incurring
responsibility to the Borrowers, and without impairing or releasing the
obligations of the Borrowers in whole or in part, (i) exercise or refrain
from exercising any rights against any Borrower, (ii) sell, exchange,
release, surrender, realize upon or
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otherwise deal with in any manner or in any order any property pledged or
mortgaged to secure or in any manner securing the Obligations, (iii) take
and hold any additional security for any or all of the Obligations, (iv)
apply any sums by whomsoever paid or howsoever realized to any Obligations
of the Borrowers to the Lender regardless of what Obligations remain
unpaid.
(b) No invalidity, irregularity or unenforceability of the Obligations
of a Borrower under this Agreement or any other Loan Document shall affect,
impair or be a defense to the other Borrowers' Obligations. Each Borrower
hereby waives, to the extent permitted under Applicable Law, any and all
benefits and defenses under any statute, regulation, judicial decision or
other law which purports to exonerate or reduce the liability of a co-
borrower as a result of any disability or absence of liability of the other
co-borrower or any defense to liability or enforcement which the other co-
borrower may have and agrees that, by so doing, such Borrower's obligations
hereunder shall continue even if the other Borrowers had no liability at
the time of execution of this Agreement or thereafter ceased or cease to be
liable. Each Borrower also waives, to the extent permitted under
Applicable Law, any and all benefits and defenses under any statute,
regulation, judicial decision or other law which purports to limit the
liability of a co-borrower to that of the other co-borrower or to reduce
the liability of a co-borrower in proportion to any reduction in the
liability of the other co-borrower and agrees that, by so doing, such
Borrower's obligations hereunder may be more burdensome than that of the
other Borrowers.
(c) Each Borrower, to the extent permitted under Applicable Law,
hereby waives any right, whether arising under any statute, regulation,
judicial decision or otherwise, to require the Lender to (i) proceed
against the other Borrowers, (ii) proceed against or exhaust any security
received from the other Borrowers, or (iii) pursue any other right or
remedy in the Lender's power whatsoever.
(d) Each Borrower further waives, to the extent permitted under
Applicable Law: (i) any defense resulting from the absence, impairment or
loss of any right of reimbursement, subrogation, contribution or other
right or remedy of such Borrower against the other Borrowers or any
security, whether resulting from an election by the Lender to foreclose
upon security by judicial or nonjudicial sale or otherwise; (ii) any setoff
or counterclaim of such Borrower or any defense of any kind (including
defenses resulting from any disability) or the cessation or stay of
enforcement from any cause whatsoever of the liability of such Borrower
(including without limitation the lack of validity or enforceability of
this Agreement or any other Loan Document); (iii) any right to exoneration,
in whole or in part, of co-borrowers which would otherwise be applicable;
(iv) any benefits and defenses under Applicable Law, including
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<PAGE>
without limitation any right of subrogation or reimbursement, any right of
contribution, any right to enforce any remedy which the Lender now has or
may hereafter have against the other Borrowers, and any benefit of, and any
right to participate in, any security now or hereafter held or received by
the Lender; and (v) all valuation, appraisal, extension or redemption laws
now or hereafter in effect. Without limiting the generality of the
preceding clause (iv), each Borrower hereby waives any right to be
reimbursed by the other Borrowers for any payment of such obligations made
directly or indirectly by such Borrower or from any property of such
Borrower, whether arising by way of any statutory, contractual or other
right of subrogation, contribution, indemnification or otherwise.
(e) Each Borrower acknowledges that it has the ability, and hereby
assumes the obligation and responsibility, to keep informed of the
financial condition of the other Borrowers and of other matters or
circumstances affecting the ability of the other Borrowers to pay or
perform their obligations hereunder or the risk of nonpayment and
nonperformance. Each Borrower hereby waives, to extent permitted under
Applicable Law, any obligation on the part of the Lender to inform such
Borrower of the financial condition, or any changes in financial condition,
of the other Borrowers or of any other matter or circumstance which might
affect the ability of the other Borrowers to pay and perform under this
Agreement or any other Loan Document, or the risk of nonpayment or
nonperformance.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
LATEX PETROLEUM CORPORATION, an Oklahoma
corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
LATEX/GOC ACQUISITION, INC., a Delaware
corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
87
<PAGE>
GERMANY OIL COMPANY, a Delaware corporation,
formerly known as LRI ACQUISITIONS, INC.
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
ALLIANCE RESOURCES (USA) INC., a Delaware
corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
88
<PAGE>
SOURCE PETROLEUM INC., a Louisiana
corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:
Name: Richard D. Bluth
Title: Vice President
Address: 333 Clay Street
Suite 4450
Houston, TX 77002
Attn: Energy and
Minerals Dept.
Oil & Gas Group
Fax: (713) 651-4888
LIBOR OFFICE:
231 South LaSalle Street
Chicago, IL 60697
Attn: Energy and
Minerals Dept.
Oil & Gas Group
Fax: (312) 974-9626
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<PAGE>
DOMESTIC OFFICE:
231 South LaSalle Street
Chicago, IL 60697
Attn: Energy and
Minerals Dept.
Oil & Gas Group
Fax: (312) 974-9626
90
<PAGE>
SCHEDULE I
DISCLOSURE SCHEDULE
-------------------
-1-
<PAGE>
SCHEDULE II
Regular Principal Payments
Commencing on October 31, 1998, $325,000 per month.
-1-
<PAGE>
SCHEDULE III
Existing Intercompany Indebtedness
-1-
<PAGE>
SCHEDULE IV
Existing Trade Payables
-2-
<PAGE>
SCHEDULE V-1
Title Properties
(Certain Existing Collateral)
-1-
<PAGE>
SCHEDULE V-2
Title Properties
(Certain New Collateral)
<TABLE>
<CAPTION>
TITLE REPORT
PROPERTY PARISH/STATE REQUIRED
- -------------------------------------- ------------------ ------------
<S> <C> <C>
1. Tupper No. 7, South Elton Field Jefferson Davis/LA Yes
2. Tupper No. 2, South Elton Field Jefferson Davis/LA Yes
3. Valentine Sugars Nos. 2, 3 and LaFourche/LA Yes
4, Valentine Field
</TABLE>
-2-
<PAGE>
SCHEDULE VI
PROJECTED SALES PROCEEDS
From Approved Asset Sales
-------------------------
Asset Projected Sales Proceeds
- ----- ------------------------
(See Initial Business Plan at Schedule VII)
-1-
<PAGE>
SCHEDULE VII
INITIAL BUSINESS PLAN
-2-
<PAGE>
EXHIBIT A
SECOND AMENDED AND RESTATED CONSOLIDATED
SECURED PROMISSORY NOTE
$______________ ____________, 1997
FOR VALUE RECEIVED, the undersigned, LATEX PETROLEUM CORPORATION, an
Oklahoma corporation, LATEX/GOC ACQUISITION, INC., a Delaware corporation,
GERMANY OIL COMPANY, a Delaware corporation, formerly known as LRI ACQUISITION,
INC., ALLIANCE RESOURCES (USA) INC., a Delaware corporation and SOURCE PETROLEUM
INC., a Louisiana corporation (the "Borrowers"), jointly and severally promise
to pay to the order of Bank of America National Trust and Savings Association, a
national banking association (the "Lender") on March 31, 2000, the principal sum
of ___________ MILLION ___________________ THOUSAND DOLLARS ($________________)
or, if less, the aggregate unpaid principal amount of all Loans shown on the
schedule attached hereto (and any continuation thereof) made by the Lender
pursuant to that certain Second Amended and Restated Credit Agreement, dated as
of _______________, 1997 (together with all amendments and other modifications,
if any, from time to time thereafter made thereto, the "Credit Agreement"),
among the Borrowers and the Lender.
The Borrowers also promise to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the Lender pursuant to the Credit Agreement.
This Note amends, restates and consolidates in their entirety those notes
previously acquired by the Lender and those notes previously made and given by
the Borrowers to the Lender as more particularly described in the Credit
Agreement.
This Note is the Note referred to in, and evidences Indebtedness incurred
under, the Credit Agreement, to which reference is made for a description of the
security for this Note and for a statement of the terms and conditions on which
the Borrowers are permitted and required to make prepayments and repayments of
principal of the Indebtedness evidenced by this Note and on which such
Indebtedness may be declared to be immediately due and payable. Unless
otherwise defined, terms used herein have the meanings provided in the Credit
Agreement.
-1-
<PAGE>
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
LATEX PETROLEUM CORPORATION, an
Oklahoma corporation
By:
Name:
Title:
LATEX/GOC ACQUISITION, INC., a Delaware
corporation
By:
Name:
Title:
GERMANY OIL COMPANY, a Delaware
corporation, formerly known as
LRI ACQUISITION, INC.
By:
Name:
Title:
Signatures continued on next page.
-2-
<PAGE>
ALLIANCE RESOURCES (USA) INC.,
a Delaware corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
SOURCE PETROLEUM INC., a Louisiana
corporation
By:
Name:
Title:
Address: 4200 E. Skelly Drive
Suite 1000
Tulsa, OK 74135
Attn: President
Fax: (918) 492-8027
-3-
<PAGE>
LOANS AND PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
Amount
of Loan Amount of Principal Unpaid Principal
Made Repaid Repaid
---------- ---------------------------------------
LIBOR Interest Base LIBOR Base LIBOR Notation
Date Rate Period Rate Rate Rate Rate Total Made By
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
-4-
<PAGE>
EXHIBIT B-1
FORM OF REGISTRATION RIGHTS AGREEMENT
-1-
<PAGE>
EXHIBIT B-2
FORM OF WARRANT AGREEMENT
-1-
<PAGE>
EXHIBIT B-3
FORM OF WARRANT INSTRUMENT
-1-
<PAGE>
EXHIBIT C-1
Form of
BORROWING REQUEST
Bank of America
National Trust and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
Re: LATEX PETROLEUM CORPORATION, LATEX/GOC ACQUISITION, INC., GERMANY OIL
COMPANY, F/K/A LRI ACQUISITION, INC., ALLIANCE RESOURCES (USA) INC. AND
SOURCE PETROLEUM INC.
Ladies and Gentlemen:
This Borrowing Request is delivered to you pursuant to Section 2.3 of the
Second Amended and Restated Credit Agreement, dated as of _______________, 1997,
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among LATEX PETROLEUM CORPORATION, an Oklahoma corporation,
LATEX/GOC ACQUISITION, INC., a Delaware corporation and GERMANY OIL COMPANY, a
Delaware corporation, formerly known as LRI Acquisition, Inc., ALLIANCE
RESOURCES (USA) INC., a Delaware corporation and SOURCE PETROLEUM INC., a
Louisiana corporation (the "Borrowers") and Bank of America National Trust and
Savings Association (the "Lender"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
The Borrowers hereby request that a Loan be made in the aggregate principal
amount of $__________ on __________, 19__ as a [Base Rate Loan] [LIBO Rate Loan
having an Interest Period of [one] [two] [three] [six] months.]
The Borrowers hereby acknowledge that, pursuant to Section 6.2.2 of the
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrowers of the proceeds of the Loans requested hereby
constitute a
-1-
<PAGE>
representation and warranty by the Borrowers that, on the date of such Loans,
and before and after giving effect thereto and to the application of the
proceeds therefrom, all statements set forth in Section 6.2.1 are true and
correct in all material respects (unless stated to relate solely to an earlier
date, in which case such statements shall be true and correct as of such earlier
date).
The Borrowers agree that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct at such
time as if then made, they will immediately so notify the Lender. Except to the
extent, if any, that prior to the time of the Borrowing requested hereby the
Lender shall receive written notice to the contrary from the Borrowers, each
matter certified to herein shall be deemed once again to be certified as true
and correct at the date of such Borrowing as if then made.
Please wire transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated respectively:
<TABLE>
<CAPTION>
Amount to be Person to be Paid Name, Address, etc.
Transferred Name Account No. of Transferee Lender
- --------------- ----------------- ----------- --------------------
<S> <C> <C> <C>
$__________ ______________ __________ ___________________
Attention:
$__________ ______________ __________ ___________________
Attention:
Balance of The Borrowers
such proceeds ___________________
Attention:
</TABLE>
-2-
<PAGE>
IN WITNESS WHEREOF, the Borrowers have caused this request to be
executed and delivered by its duly Authorized Officer as of __________ __, 19__.
LATEX PETROLEUM CORPORATION, an Oklahoma
corporation
By:
Name:
Title:
LATEX/GOC ACQUISITION, INC., a Delaware
corporation
By:
Name:
Title:
GERMANY OIL COMPANY, a Delaware
corporation, formerly known as
LRI Acquisition, Inc.
By:
Name:
Title:
ALLIANCE RESOURCES (USA) INC.,
a Delaware corporation
By:
Name:
Title:
Signatures continued on next page.
-3-
<PAGE>
SOURCE PETROLEUM INC., a Louisiana
corporation
By:
Name:
Title:
-4-
<PAGE>
EXHIBIT C-2
Form of
CONTINUATION/CONVERSION NOTICE
Bank of America
National Trust and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
Re: LATEX PETROLEUM CORPORATION, LATEX/GOC ACQUISITION, INC., GERMANY OIL
COMPANY, F/K/A LRI ACQUISITION, INC., ALLIANCE RESOURCES (USA) INC.
AND SOURCE PETROLEUM INC.
Ladies and Gentlemen:
This Continuation/Conversion Notice is delivered to you pursuant to Section
2.4 of the Amended and Restated Credit Agreement, dated as of ___________, 1995
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among LATEX PETROLEUM CORPORATION, LATEX/GOC ACQUISITION,
INC., GERMANY OIL COMPANY, formerly known as LRI ACQUISITION, INC., ALLIANCE
RESOURCES (USA) INC., a Delaware corporation and SOURCE PETROLEUM INC., a
Louisiana corporation (the "Borrowers") and Bank of America National Trust and
Savings Association (the "Lender"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
The Borrowers hereby request that on _______, 19__,
(1) $_________ of the presently outstanding principal amount of the
Loans originally made on _________, 19__ [and $_______ of the presently
outstanding principal amount of the Loans originally made on _______,
19__],
(2) and all presently being maintained as LIBO Rate Loans,
(3) be [converted into] [continued as],
-1-
<PAGE>
(4) [LIBO Rate Loans having an Interest Period of ____ months] [Base
Rate Loans].
The Borrowers hereby:
(a) certify and warrant that no Default has occurred and is
continuing; and
(b) agree that if prior to the time of such continuation or conversion
any matter certified to herein by them will not be true and correct at such
time as if then made, they will immediately notify the Lender.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Lender shall receive written notice to the
contrary from the Borrowers, each matter certified to herein shall be deemed to
be certified at the date of such continuation or conversion as if then made.
-2-
<PAGE>
IN WITNESS WHEREOF, the Borrowers have caused this request to be executed
and delivered by its duly Authorized Officer as of __________ __, 19__.
LATEX PETROLEUM CORPORATION,
an Oklahoma corporation
By:
Name:
Title:
LATEX/GOC ACQUISITION, INC.,
a Delaware corporation
By:
Name:
Title:
GERMANY OIL COMPANY, a Delaware
corporation, formerly known as
LRI Acquisition, Inc.
By:
Name:
Title:
ALLIANCE RESOURCES (USA) INC.,
a Delaware corporation
By:
Name:
Title:
Signatures continued on next page.
-3-
<PAGE>
SOURCE PETROLEUM INC., a Louisiana
corporation
By:
Name:
Title:
-4-
<PAGE>
EXHIBIT D-1
FORM OF AMENDED AND RESTATED UNDERTAKING AND AGREEMENT
-1-
<PAGE>
EXHIBIT D-2
FORM OF GUARANTY
-1-
<PAGE>
EXHIBIT D-3
FORM OF AMENDED AND RESTATED GUARANTY
-1-
<PAGE>
EXHIBIT E-1
FORMS OF MORTGAGE
-1-
<PAGE>
EXHIBIT E-2
NEW SECTION 2.10 OF MORTGAGE
2.10 Right of Entry.
(a) The Mortgagor will permit the Trustees or the Bank, or the agents
of either of them, at the cost and expense of the Mortgagor, to enter upon the
Mortgaged Property and all parts thereof, for the purpose of investigating and
inspecting the condition and operation thereof, and shall permit reasonable
access to the field offices and other offices, including the principal place of
business, of the Mortgagor to inspect and examine the Mortgaged Property and to
inspect, review and reproduce as necessary any books, records, accounts,
contracts or other documents of the Mortgagor.
(b) Without limiting the generality of the foregoing, the Bank shall
have the right, on twenty-four (24) hours prior notice to the Mortgagor, to
cause such persons and entities as the Bank may designate to enter the Mortgaged
Property to conduct (at the cost and expense of the Mortgagor), or to cause the
Mortgagor to conduct (at the cost and expense of the Mortgagor), such tests and
investigations as the Bank deems necessary to determine whether any hazardous
substance or solid waste is being generated, transported, stored, or disposed of
in accordance with applicable Environmental Laws. Such tests and investigations
may include, without limitation, underground borings, ground water analyses and
borings from the floors, ceilings and walls of any improvements located on the
Mortgaged Property. This Section 2.10 shall not be construed to affect or limit
the obligations of the Mortgagor pursuant to Section 2.5 hereof.
(c) The Bank shall have no duty to visit or observe the Mortgaged
Property or to conduct tests, and no site visit, observation or testing by the
Bank shall impose any liability on the Bank, nor shall the Mortgagor or any
other Obligor be entitled to rely on any visit, observation or testing by the
Bank in any respect. The Bank may, in its discretion, disclose to the Mortgagor
or any other Person, including any governmental agency, any report or finding
made as a result of, or in connection with, any site visit, observation or
testing by the Bank. The Mortgagor agrees that the Bank makes no warranty or
representation to the Mortgagor or any other Obligor regarding the truth,
accuracy or completeness of any such report or findings that may be so
disclosed. The Mortgagor also acknowledges that, depending upon the results of
any site visit, observation or testing by the Bank and disclosed to the
Mortgagor, the Mortgagor may have a legal obligation to notify one or more
governmental agencies of such results, that such reporting requirements are
site-specific, and are to be evaluated by the Mortgagor without advice or
assistance from the Bank.
-2-
<PAGE>
EXHIBIT F-1
FORM OF PLEDGE AGREEMENT
-1-
<PAGE>
EXHIBIT F-2
FORM OF AMENDED AND RESTATED PLEDGE AGREEMENT
-1-
<PAGE>
EXHIBIT G
LENDER ASSIGNMENT NOTICE
Bank of America
National Trust and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
Re: LATEX PETROLEUM CORPORATION, LATEX/GOC ACQUISITION, INC., GERMANY OIL
COMPANY, F/K/A LRI ACQUISITION, INC., ALLIANCE RESOURCES (USA) INC. and
SOURCE PETROLEUM INC.
Ladies and Gentlemen:
We refer to clause (b) of Section 10.11.1 of the Second Amended and
Restated Credit Agreement, dated as of __________________, 1997, (together with
all amendments and other modifications, if any, from time to time thereafter
made thereto, the "Credit Agreement"), among LATEX PETROLEUM CORPORATION, an
Oklahoma corporation, LATEX/GOC ACQUISITION, INC., a Delaware corporation,
GERMANY OIL COMPANY, a Delaware corporation, formerly known as LRI Acquisition,
Inc., ALLIANCE RESOURCES (USA) INC., a Delaware corporation and SOURCE PETROLEUM
INC., a Louisiana corporation (the "Borrowers") and Bank of America National
Trust and Savings Association (the "Lender"). Unless otherwise defined herein
or the context otherwise requires, terms used herein have the meanings provided
in the Credit Agreement.
This notice is delivered to you pursuant to clause (b) of Section 10.11.1
of the Credit Agreement and also constitutes notice to each of you, pursuant to
clause (a) of Section 10.11.1 of the Credit Agreement, of the assignment and
delegation to _______________ (the "Assignee") of ___% (and the Assignor hereby
assigns and delegates to the Assignee __%_) of the Loans and Commitments of
_____________ (the "Assignor") outstanding under the Credit Agreement on the
date hereof. After giving effect to the foregoing assignment and delegation,
the Assignor's and the Assignee's Percentages for the purposes of the Credit
Agreement are set forth on Schedule I hereto. The Assignor makes such
assignment and delegation without any representations, warranties or recourse
whatsoever except that the Assignor is the
-1-
<PAGE>
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim.
[Add paragraph dealing with accrued interest with respect to Loans
assigned.]
The Assignee hereby acknowledges and confirms that it has received a copy
of the Credit Agreement and the exhibits related thereto, together with copies
of the documents which were required to be delivered under the Credit Agreement
as a condition to the making of the Credit Extensions thereunder.
Except as otherwise provided in the Credit Agreement, effective as of the
date of delivery hereof
(a) the Assignee
(i) shall be deemed automatically to have become a party to the
Credit Agreement, have all the rights and obligations of a "Lender"
under the Credit Agreement and the other Loan Documents as if it were
an original signatory thereto to the extent specified in the second
paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set forth in
the Credit Agreement and the other Loan Documents as if it were an
original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement and the other Loan Documents to the extent specified in
the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor] [Assignee]
will pay to the Lender the processing fee referred to in Section 10.11.1 of the
Credit Agreement upon the delivery hereof.
Administrative information for the Assignee is set forth in Schedule II
hereto.
-2-
<PAGE>
This notice may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.
[ASSIGNOR]
By:_______________________
Title:
[ASSIGNEE]
By:_______________________
Title:
-3-
<PAGE>
SCHEDULE I
TO LENDER
ASSIGNMENT NOTICE
ASSIGNOR'S ADJUSTED PERCENTAGES:
Commitment and Loans: __%
Letters of Credit __%
ASSIGNEE'S PERCENTAGES:
Commitment and Loans: __%
Letters of Credit __%
-4-
<PAGE>
SCHEDULE II
TO LENDER
ASSIGNMENT NOTICE
ADDRESS FOR NOTICES:
Name of Assignee:_________________
-5-
<PAGE>
EXHIBIT H-1
FORM OF OPINIONS OF COUNSEL TO THE BORROWERS
AND TO THE OTHER OBLIGORS
(Existing Agreement)
<PAGE>
EXHIBIT H-2
FORM OF OPINION OF COUNSEL TO THE BORROWERS
AND TO THE OTHER OBLIGORS
(Second Amended and Restated Credit Agreement)
<PAGE>
EXHIBIT I-1
FORM OF OPINIONS OF SPECIAL
TITLE COUNSEL TO THE BORROWERS
(Existing Agreement)
<PAGE>
EXHIBIT I-2
FORMS OF OPINIONS OF
LOCAL COUNSEL TO THE BORROWERS
(Existing Agreement)
<PAGE>
EXHIBIT I-3
FORMS OF OPINIONS OF
TITLE COUNSEL TO THE BORROWERS
(Second Amended and Restated Agreement)
<PAGE>
EXHIBIT J
FORM OF ASSIGNMENT OF
OVERRIDING ROYALTY INTEREST
<PAGE>
EXHIBIT K
ISSUANCE REQUEST
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
LATEX PETROLEUM CORPORATION
LATEX/GOC ACQUISITION, INC.
GERMANY OIL COMPANY
ALLIANCE RESOURCES (USA) INC.
SOURCE PETROLEUM INC.
Ladies and Gentlemen:
This Issuance Request is delivered to you pursuant to Section 4.1 of the
Second Amended and Restated Credit Agreement, dated as of ______________, 1997
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among LaTex Petroleum Corporation, an Oklahoma corporation,
LaTex/GOC Acquisition, Inc., a Delaware corporation and Germany Oil Company, a
Delaware corporation, Alliance Resources (USA) Inc., a Delaware corporation and
Source Petroleum Inc., a Louisiana corporation (the "Borrowers") and Bank of
America National Trust and Savings Association, a national banking association
(the "Lender"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
The Borrowers hereby request that on _________, 19__ (the "Date of
Issuance") Lender /1/[issue a Letter of Credit on ______________, 19__ in the
initial Stated Amount of $_______________ with a Stated Expiry Date (as defined
therein) of ______________, 19__] [extend the Stated Expiry Date (as defined
under Irrevocable Standby Letter of Credit No.__, issued on
__________________________, 19 __, in the initial Stated
- -------------------
/1/ Insert as appropriate.
<PAGE>
Amount of $______________) to a revised Stated Expiry Date (as defined therein)
of _________________, 19__].
The beneficiary of the requested Letter of Credit will be
/2/_______________________________, and such Letter of Credit will be in support
of /3/________________________________.
The Borrowers hereby acknowledge that, pursuant to Section [6.3.1] of the
Credit Agreement, each of the delivery of this Issuance Request and the
[issuance][extension] of the Letter of Credit requested hereby constitutes a
representation and warranty by the Borrowers that, on such date of [issuance]
[extension] all statements set forth in Section [6.3.1] are true and correct in
all material respects (unless such statements relate solely to an earlier date,
in which case such statements shall be true and correct as of such earlier
date).
The Borrowers agree that if, prior to the time of the /4/[issuance]
[extension] of the Letter of Credit requested hereby, any matter certified to
herein by it will not be true and correct at such time as if then made, it will
immediately so notify the Lender. Except to the extent, if any, that prior to
the time of the issuance or extension requested hereby the Lender shall receive
written notice to the contrary from the Borrowers, each matter certified to
herein shall be deemed to be certified at the date of such issuance or
extension.
- -----------------------
/2/ Insert name and address of beneficiary.
/3/ Insert description of supported Indebtedness or other obligations and name
of agreement to which it relates.
/4/ Complete as appropriate.
<PAGE>
IN WITNESS WHEREOF, the Borrowers have caused this request to be executed
and delivered by its duly Authorized Officer as of __________ __, 19__.
LATEX PETROLEUM CORPORATION
By ________________________
Title:
LATEX/GOC ACQUISITION, INC.
By ________________________
Title:
GERMANY OIL COMPANY
By ________________________
Title:
ALLIANCE RESOURCES (USA) INC.
By ________________________
Title:
SOURCE PETROLEUM INC.
By ________________________
Title:
<PAGE>
EXHIBIT L
FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
_____________________
_____________________
Irrevocable Standby Letter of Credit No. _______
_________________
_________________
_________________
Attention: ________________
________________
Ladies and Gentlemen:
At the request and on the instructions of our customers, LaTex Petroleum
Corporation, an Oklahoma corporation, LaTex/GOC Acquisition, Inc., a Delaware
corporation, Germany Oil Company, a Delaware corporation, Alliance Resources
(USA) Inc., a Delaware corporation and Source Petroleum Inc., a Louisiana
corporation (the "Account Parties"), we hereby establish in your favor this
irrevocable, standby, non-transferable Letter of Credit in the original amount
of /1/$________.
SECTION 1. Definitions. The following terms when used in this Letter of
Credit shall have the following meanings:
"Account Party" is defined in the first paragraph.
"Authorized Officer" shall mean any of your ____________ whose signatures
shall have been satisfactorily certified to us.
- -----------------
/1/ Insert appropriate Dollar amount.
<PAGE>
"Business Day" shall mean any day on which we are open for the purpose of
conducting commercial banking business at our Payment Office.
"Credit Agreement" means the Second Amended and Restated Credit Agreement,
dated as of ________________, 1997 (as amended, supplemented, amended and
restated or otherwise modified from time to time thereafter), among the Account
Parties, and Bank of America National Trust and Savings Association (the
"Lender", individually, a "Lender").
"Payment Office" is defined in Section 2.
"Stated Amount" means, at any time, the original amount of this Letter of
Credit set forth in the first paragraph, as such amount has at such time been
reduced in accordance with Section 4.
"Stated Expiry Date" means ________, 19__, or such later date of which we
advise you as being the date to which this Letter of Credit has been extended.
SECTION 2. Presentation. Funds under this Letter of Credit will be made
available to you, in lawful currency of the United States of America, against
receipt by us of your written certificate in the form of Attachment 1 hereto,
appropriately completed and signed by an Authorized Officer accompanied by the
original of this Letter of Credit. Presentation of each such certificate shall
be made in person at our office located at _______________________/2/
__________________________, Attention: _____________________ (our "Payment
Office").
SECTION 3. Payments. Demands for payment in lawful money of the United
States of America may be made by you under this Letter of Credit before 4:00
p.m. during our business hours at our Payment Office on any Business Day;
provided, however, that at no time shall the number of demands exceed [ ]. If
demand for payment is made by you hereunder at or prior to 11:00 a.m. (Chicago
time) on a Business Day, and provided that such demand for payment and the
documents presented in connection therewith conform to the terms and conditions
hereof, payment will be made to you, or to your designee, of the amount
demanded, in same day funds, at our Payment Office not later than 10:00 a.m.
(Chicago time) on the third succeeding Business Day. If demand for payment is
made by you hereunder after 11:00 a.m. (Chicago time) on a Business Day, and
provided that such demand for payment and the documents presented in connection
therewith conform to the terms and conditions hereof, payment shall be made to
you, or to your designee, of the amount demanded, in same day funds, at our
Payment Office not later than 10:00 a.m. (Chicago time), on the fourth
succeeding Business Day. If requested by you,
- ------------------
/2/ Insert office address of Issuer.
<PAGE>
payment under this Letter of Credit will be made by wire transfer of same day
funds to the account specified in your demand for payment. If a demand for
payment made by you hereunder does not, in any instance, conform to the terms
and conditions of this Letter of Credit, we shall give you prompt notice that
the demand for payment was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons therefor, and that we
will (subject to your further instructions) hold any documents at your risk and
disposal which have been delivered to us by you. Upon being notified that the
demand for payment was not effected in conformity with this Letter of Credit,
you may attempt to correct any such non-conforming demand for payment to the
extent that you are then entitled and able to do so.
SECTION 4. Reduction of Stated Amount. Each payment made by us hereunder
shall permanently reduce the Stated Amount by the amount of such payment, and no
demand for payment hereunder shall exceed the Stated Amount in effect at such
time. The Stated Amount of this Letter of Credit shall also be permanently
reduced from time to time upon our receipt of your certification in the form of
Attachment 2 hereto, appropriately completed and signed by an Authorized
Officer.
SECTION 5. Discharge. Only you may make a demand for payment under this
Letter of Credit. Upon the payment to you, to your designee, or to your account
of the amount demanded hereunder, we shall be fully discharged of our obligation
under this Letter of Credit to the extent of such demand for payment, and, to
the extent of such payment, we shall not thereafter be obligated to make any
further payments under this Letter of Credit. By paying to you, to your
designee, or to your account any amount demanded in accordance herewith, we make
no representation as to the correctness of the amount demanded.
SECTION 6. Termination. Upon the earliest of:
(a) the making by us of the final payment available to be made
hereunder;
(b) the close of business at our Payment Office on the Stated Expiry
Date;
(c) the close of business at our Payment Office on the day occurring
30 days after we have given you written notice, at your address specified
above, that an Event of Default (as defined in the Credit Agreement) has
occurred and is continuing; or
<PAGE>
(d) receipt by us of a certificate signed by an Authorized Officer
stating that all obligations to which this Letter of Credit relates have
been terminated, paid, or otherwise satisfied in full,
this Letter of Credit shall automatically terminate. Upon its termination, you
shall promptly deliver the original counterpart of this Letter of Credit to us
for cancellation.
SECTION 7. Notices, etc. Communications with respect to this Letter of
Credit shall be in writing and shall be addressed to us at our Payment Office,
Attention: ________________________, specifically referring thereon to this
Letter of Credit by number, followed by a copy to the Account Party at the
address set forth in Section 2.
SECTION 8. Governing Law. THIS LETTER OF CREDIT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER, AND SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, [AND ALSO SUBJECT TO UCP 1983 REVISION ICC PUBLICATION NO. 400 AS IN
EFFECT]; provided, however, that, to the extent of any inconsistency between
the terms of this Letter of Credit and the UCP, the terms of this Letter of
Credit shall govern.
SECTION 9. Miscellaneous. This Letter of Credit may not be transferred or
assigned, either in whole or in part. This Letter of Credit sets forth in full
our undertaking, and such undertaking shall not in any way be modified, amended,
amplified, or limited by reference to any document, instrument, or agreement
referred to herein.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By __________________________
Title:
<PAGE>
ATTACHMENT 1
CERTIFICATE OF DEMAND FOR PAYMENT
_____________, 19__
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
Re: Irrevocable Standby Letter of Credit No. -
The undersigned, a duly Authorized Officer of _____________ (the
"Beneficiary"), hereby certifies to Bank of America National Trust and Savings
Association (the "Issuer") that:
(a) Unless otherwise defined, all capitalized terms used herein have
the meanings assigned thereto in the Irrevocable Standby Letter of Credit
No.__ (the "Letter of Credit"), dated ____________, 19__, issued by the
Issuer on the application of LaTex Petroleum Corporation, LaTex/GOC
Acquisition, Inc., Germany Oil Company, Alliance Resources (USA) Inc., a
Delaware corporation and Source Petroleum Inc., a Louisiana corporation
(the "Account Parties").
/3/[(b) The Beneficiary is making a demand for payment in lawful money of
the United States of America under the Letter of Credit in the amount of
$_________, which will be applied to payment of the obligations of the
Account Party in connection with _________ under the __________ Agreement
(the "Agreement"). The amount being demanded hereunder is now due and
owing under the Agreement and payment of the amount being demanded
hereunder was demanded of the Account Parties on _____________ (which is
not less than five Business Days prior to the date hereof), and has not yet
been paid. The amount demanded hereby does not on the date hereof, and
will not on the date payment hereunder is required to be made after giving
effect to all other
- ----------------
/3/ Select appropriate alternative and complete appropriately.
<PAGE>
amounts demanded under the Letter of Credit, exceed the Stated Amount of
the Letter of Credit.]
[(b) The Beneficiary is making a demand for payment in lawful money of
the United States of America under the Letter of Credit in the amount of
$__________, which is the entire Stated Amount of the Letter of Credit as
in effect on the date hereof, following its receipt of a written notice
from you stating that an Event of Default has occurred and is continuing
and, as a result thereof, the Letter of Credit will be terminated.]
(c) Upon its receipt of the amount demanded under the Letter of
Credit, the Beneficiary will
(i) apply such amount directly to the payment of the Account
Parties' obligations under the _________ Agreement; and
(ii) if after the application of proceeds described in clause
(i) such obligations will be paid in full, deliver to you the original
copy of the Letter of Credit, all releases as you may reasonably
request, and all security, if any, held in respect of such
obligations.
(d) [Insert disbursement instructions.]
IN WITNESS WHEREOF, the Beneficiary has caused its Authorized Officer to
execute and deliver this Certificate as of _________ __, 19__.
[Name of Beneficiary]
By _________________________
Title:
<PAGE>
ATTACHMENT 2
CERTIFICATE OF REDUCTION
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
231 South LaSalle Street
Chicago, Illinois 60697
Telecopy: ____________
Attention: [Name]
[Title]
Re: Irrevocable Standby Letter of Credit No.-
The undersigned, a duly Authorized Officer of ____________________ (the
"Beneficiary"), hereby requests Bank of America National Trust and Savings
Association (the "Issuer"), to reduce the Stated Amount of the Irrevocable
Standby Letter of Credit No. ___ (the "Letter of Credit"), dated _____________,
19__, issued on the application of LaTex Petroleum Corporation, LaTex/GOC
Acquisition Inc., Germany Oil Company, Alliance Resources Inc. and Source
Petroleum Inc. /4/from __________ to __________.
Unless otherwise defined herein, all capitalized terms used herein and
defined in the Letter of Credit shall be used herein as so defined.
IN WITNESS WHEREOF, the Beneficiary has caused its Authorized Officer to
execute and deliver this Certificate as of ___________, 19__.
[Name of Beneficiary]
By _________________________
Title:
- ------------------
/4/ Insert appropriate amounts.
<PAGE>
EXHIBIT M
FORM OF SECURITY AGREEMENT
<PAGE>
EXHIBIT N
FORM OF CONVERTIBLE LOAN NOTE
<PAGE>
EXHIBIT O
FORM OF EXCHANGE AGREEMENT
<PAGE>
T A B L E O F C O N T E N T S
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<C> <S> <C>
1.1. Defined Terms.................................................. 2
1.2. Use of Defined Terms........................................... 26
1.3. Cross-References............................................... 26
1.4. Accounting and Financial Determinations........................ 26
1.5. Interpretational Provisions.................................... 26
ARTICLE II.
COMMITMENTS, BORROWING PROCEDURES AND NOTE
2.1. Commitments.................................................... 27
2.1.1. Tranche A Commitment........................................... 27
2.1.2. Tranche B Commitment........................................... 28
2.1.3. Commitment to Issue Letters of Credit.......................... 28
2.1.4. Lender Not Required To Make Loans Under Certain Circumstances.. 28
2.1.5. Lender Not Required To Issue Letters of Credit Under Certain
Circumstances.................................................. 28
2.2. Reduction of Commitment Amounts................................ 29
2.2.1. Optional....................................................... 29
2.2.2. Mandatory...................................................... 29
2.3. Borrowing Procedure............................................ 29
2.4. Continuation and Conversion Elections.......................... 29
2.5. Loan Accounts and Note......................................... 30
2.6. Collateral Value Redetermination............................... 30
2.7. Purposes....................................................... 31
ARTICLE III.
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments and Certain Collateral
Value Matters.................................................. 31
3.1.1. Repayments and Prepayments..................................... 31
3.1.2. Collateral Value Deficiencies.................................. 33
3.2. Interest Provisions............................................ 33
3.2.1. Rate........................................................... 33
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
3.2.2. Post-Maturity Rates............................................ 34
3.2.3. Payment Dates.................................................. 34
3.2.4. Maximum Interest............................................... 35
3.3. Fees........................................................... 36
3.3.1. Structuring Fee................................................ 36
3.3.2. Closing Fee.................................................... 36
3.3.3. Engineering Fee................................................ 36
3.3.4. Letter of Credit Face Amount Fee............................... 36
3.3.5. Letter of Credit Issuance Fee.................................. 36
3.3.6. Letter of Credit Administrative Fee............................ 36
3.4. Proceeds Account and Excess Asset Cash Flow Account............ 37
3.5. Warrants and Convertible Loan Notes Are Not Collateral
Security....................................................... 37
ARTICLE IV.
LETTERS OF CREDIT
4.1. Issuance Requests.............................................. 37
4.2. Issuances and Extensions....................................... 38
4.3. Disbursements.................................................. 39
4.4. Reimbursement.................................................. 40
4.5. Deemed Disbursements........................................... 40
4.6. Nature of Reimbursement Obligations............................ 41
4.7. Increased Costs; Indemnity..................................... 42
ARTICLE V.
CERTAIN INTEREST RATE AND OTHER PROVISIONS
5.1. LIBO Rate Lending Unlawful..................................... 44
5.2. Deposits Unavailable........................................... 44
5.3. Increased Loan Costs, etc...................................... 44
5.4. Funding Losses................................................. 45
5.5. Increased Capital Costs........................................ 46
5.6. Taxes.......................................................... 46
5.7. Payments, Computations, etc.................................... 47
5.8. Setoff......................................................... 47
5.9. Use of Proceeds................................................ 48
ARTICLE VI.
CONDITIONS PRECEDENT
6.1. Effectiveness of Agreement and Initial Borrowing............... 48
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
6.1.1. Resolutions, etc............................................... 48
6.1.2. Delivery of Note............................................... 49
6.1.3. Environmental Report........................................... 49
6.1.4. Guaranties..................................................... 49
6.1.5. Pledge Agreements.............................................. 49
6.1.6. Mortgages...................................................... 49
6.1.7. Opinions of Counsel............................................ 50
6.1.8. UCC-11s........................................................ 50
6.1.9. Evidence of Insurance.......................................... 51
6.1.10. Assignment of Overriding Royalty Interest in Exchange for
Warrant Documents.............................................. 51
6.1.11. Undertaking.................................................... 51
6.1.12. Engineering Report............................................. 51
6.1.13. Business Plan.................................................. 51
6.1.14. Disposition of Other Subsidiaries.............................. 51
6.1.15. Hedging Agreements............................................. 51
6.1.16. Closing of Merger, etc......................................... 51
6.1.17. [Not used.].................................................... 52
6.1.18. Amended and Restated Security Documents........................ 52
6.1.19. Management Agreement........................................... 52
6.1.20. Security Agreements............................................ 52
6.1.21. Closing Fees, Expenses, etc.................................... 52
6.1.22. Title Reports.................................................. 52
6.1.23. New Section 2.10 of Mortgage................................... 52
6.2. All Credit Extensions.......................................... 52
6.2.1. Compliance with Warranties, No Default, etc.................... 52
6.2.2. Borrowing Request, etc......................................... 53
6.2.3. Satisfactory Legal Form........................................ 53
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc.............................................. 54
7.2. Due Authorization, Non-Contravention, etc...................... 54
7.3. Government Approval, Regulation, etc........................... 54
7.4. Investment Company Act......................................... 55
7.5. Public Utility Holding Company Act............................. 55
7.6. Validity, etc.................................................. 55
7.7. Financial Information.......................................... 55
7.8. No Material Adverse Change..................................... 55
7.9. Litigation, Labor Controversies, etc........................... 56
7.10. Ownership of Properties........................................ 56
7.11. Taxes.......................................................... 56
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
7.12. Pension and Welfare Plans...................................... 56
7.13. Compliance with Law............................................ 57
7.14. Claims and Liabilities......................................... 57
7.15. No Prohibition on Perfection of Security Documents............. 57
7.16. Solvency....................................................... 57
7.17. Environmental Warranties....................................... 57
7.18. Regulations G, U and X......................................... 59
7.19. Accuracy of Information........................................ 59
7.20. Trade Payables and Intercompany Indebtedness.................... 59
ARTICLE VIII.
COVENANTS
8.1. Affirmative Covenants........................................... 60
8.1.1 Financial Information, Reports, Notices, Etc.................... 60
8.1.2. Compliance with Laws, etc....................................... 62
8.1.3. Maintenance and Development of Properties....................... 63
8.1.4. Insurance....................................................... 63
8.1.5. Books and Records............................................... 64
8.1.6. Environmental Covenant.......................................... 64
8.1.7. Further Assurances.............................................. 64
8.1.8. Natural Gas and Crude Oil Hedging............................... 65
8.1.9. Interest Rate Protection........................................ 66
8.1.10. Business Plan................................................... 66
8.1.11. Excess Asset Cash Flow.......................................... 66
8.1.12. Trade Payables and Intercompany Indebtedness.................... 66
8.2. Negative Covenants.............................................. 66
8.2.1. Business Activities............................................. 66
8.2.2. Indebtedness.................................................... 66
8.2.3. Liens........................................................... 67
8.2.4. Financial Condition............................................. 68
8.2.5. Investments..................................................... 69
8.2.6. Restricted Payments, etc........................................ 69
8.2.7. Rental Obligations.............................................. 70
8.2.8. Consolidation, Merger, etc...................................... 70
8.2.9. Asset Dispositions, etc......................................... 70
8.2.10. Modification of Certain Agreements.............................. 70
8.2.11. Transactions with Affiliates.................................... 70
8.2.12. Negative Pledges, Restrictive Agreements, etc................... 71
8.2.13. Take or Pay Contracts........................................... 71
</TABLE>
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<PAGE>
ARTICLE IX.
EVENTS OF DEFAULT
<TABLE>
<CAPTION>
<C> <S>............................................................. <C>
9.1. Listing of Events of Default.................................... 71
9.1.1. Non-Payment of Obligations...................................... 71
9.1.2. Breach of Warranty.............................................. 71
9.1.3. Non-Performance of Certain Covenants and Obligations............ 71
9.1.4. Non-Performance of Other Covenants and Obligations.............. 71
9.1.5. Default on Other Indebtedness................................... 72
9.1.6. Judgments....................................................... 72
9.1.7. Pension Plans................................................... 72
9.1.8. Control of the Borrowers........................................ 73
9.1.9. Bankruptcy, Insolvency, etc..................................... 73
9.1.10. Impairment of Security, etc..................................... 73
9.2. Action if Bankruptcy............................................ 74
9.3. Action if Other Event of Default................................ 74
9.4. Rights Not Exclusive............................................ 74
ARTICLE X.
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc........................................ 74
10.2. Notices......................................................... 76
10.3. Payment of Costs and Expenses................................... 76
10.4. Indemnification................................................. 77
10.5. Survival........................................................ 78
10.6. Severability.................................................... 78
10.7. Headings........................................................ 78
10.8. Execution in Counterparts, Effectiveness, etc................... 79
10.9. Governing Law; Entire Agreement................................. 79
10.10. Successors and Assigns.......................................... 79
10.11. Sale and Transfer of Loans and Note; Participations in Loans
and Note........................................................ 79
10.11.1. Assignments..................................................... 79
10.11.2. Participations.................................................. 81
10.12. Forum Selection and Consent to Jurisdiction..................... 81
10.13. Waiver of Jury Trial............................................ 82
10.14. Joint and Several Liability..................................... 82
10.15. Certain Consents and Waivers.................................... 83
</TABLE>
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<PAGE>
SCHEDULE I Disclosure Schedule
SCHEDULE II Regular Principal Payments
SCHEDULE III Existing Intercompany Indebtedness
SCHEDULE IV Existing Trade Payables
SCHEDULE V-1 Title Properties (Existing Agreement)
SCHEDULE V-2 Title Properties (Second Amended and Restated Agreement)
SCHEDULE VI Projected Sales Proceeds
SCHEDULE VII Initial Business Plan
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Registration Rights Agreement
EXHIBIT B-2 - Form of Warrant Agreement
EXHIBIT B-3 - Form of Warrant Instrument
EXHIBIT C-1 - Borrowing Request
EXHIBIT C-2 - Continuation/Conversion Notice
EXHIBIT D-1 - Form of Amended and Restated Undertaking and Agreement
EXHIBIT D-2 - Form of Guaranty
EXHIBIT D-3 - Form of Amended and Restated Guaranty
EXHIBIT E-1 - Forms of Mortgage
EXHIBIT E-2 - New Section 2.10 to Mortgage
EXHIBIT F-1 - Form of Pledge Agreement (Stock)
EXHIBIT F-2 - Form of Amended and Restated Pledge Agreement
EXHIBIT G - Form of Lender Assignment Notice
EXHIBIT H-1 - Form of Opinions of Counsel to the Borrowers and the other
Obligors (Original Agreement)
EXHIBIT H-2 - Form of Opinions of Counsel to the Borrowers and the
other Obligors (Amended and Restated Agreement)
EXHIBIT I-1 - Form of Opinions of Special Title Counsel to the Borrowers
(Original Agreement)
EXHIBIT I-2 - Forms of Opinions of Local Counsel to the Borrowers
(Existing Agreement)
EXHIBIT I-3 - Forms of Opinions of Local Counsel to the Borrowers
(Second Amended and Restated Agreement)
EXHIBIT J - Form of Assignment and Conveyance of Overriding Royalty
Interest
EXHIBIT K - Form of Issuance Request
EXHIBIT L - Irrevocable Standby Letter of Credit
EXHIBIT M - Form of Security Agreement
EXHIBIT N - Form of Convertible Loan Note
EXHIBIT O - Form of Exchange Agreement
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