EXHIBIT 10.25
SHAREHOLDERS AGREEMENT
BETWEEN
ANGLO-AFRICAN ENERGY, INC.
AND
TRANS-DOMINION HOLDINGS LIMITED
THIS AGREEMENT is made and entered into as of this 1st day of August,
2000 ("Effective Date") by and between Anglo-African Energy, Inc., a corporation
organized and existing under the laws of Delaware ("AAE") and Trans-Dominion
Holdings Limited, a corporation organized and existing under the laws of the
Island of Jersey, Channel Islands, United Kingdom ("TDH"). AAE and TDH are
individually referred to as "Party" and collectively as the "Parties".
WHEREAS, AAE and its Affiliates hold seventy-five percent (75%) and TDH
holds twenty-five percent (25%) of the issued and outstanding common stock ("XXX
Shares") of Trinidad Exploration and Development Ltd. ("XXX"); and
WHEREAS, the Parties to this Agreement, together with those persons or
entities who shall acquire XXX Shares after the date hereof and agree to be
bound by the terms hereof, desire to define their respective rights and
obligations as shareholders in XXX.
NOW THEREFORE, in consideration of the foregoing and of the mutual
premises, covenants and agreements contained herein, the parties hereto agree as
follows:
Article 1. Definitions
As used in this Agreement, the terms described below shall have the following
meanings:
1.1 Affiliate means a company, partnership or other legal entity which
controls, or is controlled by or which is controlled by an entity which
controls, a Party. Control means the ownership directly or indirectly
of more than fifty (50) percent of the voting rights in a company,
partnership or legal entity.
1.2 Agreed Interest Rate means interest compounded on a monthly basis, at
the rate per annum equal to the one (1) month term, London Interbank
Offered Rate (LIBOR rate) for U.S. dollar deposits, as published by The
Wall Street Journal or if not published, then by the Financial Times of
London, plus five (5) percentage points, applicable on
the first Business Day prior to the due date of payment and thereafter
on the first Business Day of each succeeding calendar month. If the
aforesaid rate is contrary to any applicable usury law, the rate of
interest to be charged shall be the maximum rate permitted by such
applicable law.
1.3 Agreement means this agreement, together with the Exhibits attached to
this agreement, and any extension, renewal or amendment hereof agreed
to in writing by the Parties.
1.4 Business Day means a day on which the banks in New York, NY and London,
England are open for business.
1.5 Contracts means the Farmout Agreements, the Joint Operating Agreement
between Petrotrin and XXX dated October , 1999, the Licenses and
related Deeds of Assignment and any similar agreements for the
exploitation of petroleum in the Republic of Trinidad and Tobago
entered into by XXX during the term of this Agreement.
1.6 Dollars means dollars of the United States of America.
1.7 Farmout Agreements means the Farmout Agreements for Petrotrin's
Contract Area and TED's Contract Area dated October , 1999.
1.8 Government means the government of the Republic of Trinidad and Tobago
and any political subdivision or agency or instrumentality thereof.
1.9 License or Licenses means the Exploration and Production (Public
Petroleum Rights) Licenses No. 9610 of 1970 and No. _____ of 1999 for
the Southwest Peninsula granted to Petrotrin and the Exploration and
Production (Private Petroleum Rights) License dated 16 February 1996
granted to XXX by the Government entitling them to explore and exploit
the License Area and any future Exploration and Production Licenses
obtained by the Company during the term of this Agreement.
1.8 License Area means the surface area that is described in each of the
Licenses as such area may vary from time to time in accordance with and
during the term of each such License.
1.9 Petrotrin means the Petroleum Company of Trinidad and Tobago, Ltd.
1.10 Transfer shall mean to sell, assign, convey, donate, transfer or
otherwise dispose of or to contract to do any of the foregoing.
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Article 2. Board of Directors
2.1 The Board of Directors of the Company shall consist of four directors.
AAE shall be entitled to nominate three directors, and TDH shall be
entitled to nominate one director. All corporate action shall be taken
by a majority vote of the Board of Directors.
2.2 It is agreed that the initial directors shall be Xxxxx X. Xxxxxxx,
Xxxxxx X. Xxx, Xxxxxxxxxxx X. Xxxx and Xxx Xxxxxxxx.
2.3 Each Party agrees to use its best efforts to take all action necessary
to cause the election of the directors nominated pursuant to Article
2.1.
Article 3. Restrictions on Transfer or Encumbrance
3.1 Except as necessary to implement the provisions of Articles 10.3 and
10.4, no Party shall Transfer any XXX Shares or any right, title or
interest therein or thereto and no purported Transfer shall be
effective, except as provided in this Article 3.
3.2 The certificates representing the XXX Shares shall have the following
endorsement written, printed or stamped upon the face thereof:
"This certificate is issued subject to all the terms
and conditions of a Stockholders Agreement, dated as
of August 1, 2000 by and between the Company and all
of its Stockholders as of such date and this
certificate shall not be transferred except in
compliance with all of the terms and provisions of
said agreement, a copy of which is on file with the
Company, and this certificate shall, at all times,
remain subject to the terms and conditions thereof."
3.3 Nothing contained herein shall prohibit any Party from Transferring XXX
Shares to an Affiliate, provided such transferee agrees in writing to
be bound by the terms of this Agreement.
3.4 Any Transfer by a Party of all or a portion of its XXX Shares, whether
directly or indirectly by assignment, merger, consolidation, or sale of
stock, or other conveyance, other than with or to an Affiliate, shall
be subject to the following procedure:
(A) Once the transferor Party and a proposed transferee have fully
negotiated the final terms and conditions of a Transfer of all or a
portion of its XXX Shares, such final terms and conditions shall be
disclosed in detail to the other Party in a notice from the transferor.
The other Party shall have the right to acquire the XXX Shares
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from the transferor on the same terms and conditions agreed to by the
proposed transferee it within thirty (30) days of the transferor's
notice, such Party delivers to all other Parties a counter-notification
that it accepts the agreed upon terms and conditions of the transfer
without reservations or conditions. If the other Party does not deliver
such counter-notification, the transfer to the proposed transferee may
be made, subject to the other provisions of this Article III, under
terms and conditions no more favorable to the transferee than those set
forth in the notice to the other Party, provided that the transfer
shall be concluded within one hundred eighty (180) days from the date
of the notice plus such reasonable additional period as may be required
to secure Governmental approvals.
(B) In the event that a Party's proposed Transfer of part or all of its
XXX Shares involves consideration other than cash or involves other
properties included in a wider transaction (package deal) then the XXX
Shares (or part thereof) shall be allocated a reasonable and
justifiable cash value by the transferor in any notification to the
other Party.
Article 4. Voting of XXX Shares
4.1 Each Party agrees to vote its respective XXX Shares so as to carry out
and make effective all of the terms and provisions of this Agreement.
4.2 All shareholder action may be taken by majority vote of the
shareholders except for the disposition of all of the assets of XXX,
the liquidation of XXX or any transactions between XXX and a Party or
any Affiliate of a Party, other than in the ordinary course of
business. As used herein, the term "ordinary course of business" means
any activity that is related to the exploration, production, storage,
transportation and sale of petroleum, including without limitation, the
acquisition of additional petroleum rights licenses or producing
properties. For purposes of the foregoing sentence, it is understood
and agreed by the Parties that the acquisition of petroleum rights or
licenses from a Party or its Affiliate is not a transaction in the
ordinary course of business. In the event of a sale of petroleum to a
Party, such sale shall be at the current market value f.o.b. the
delivery point. In the event that TDH disagrees with a decision of the
majority of the shareholders, and as a result of such disagreement
decides to exercise its rights under Article 10.3, the Parties agree
that, to the extent practicable, TDH's beneficial interest in the
Licenses and the Contracts shall be recognized as of the date it gives
notice of its desire to exercise its rights under Article 10.3,
adjusted in accordance with Article 6 for any subsequent loans or
investments in the Company made by the Parties.
4.3 In lieu of a meeting, any Party may submit any proposal to the other
Party for a vote by notice. Each Party shall communicate its vote by
notice to the other parties within five (5) Business Days. Any Party
failing to communicate its vote within the prescribed time period shall
be deemed to have voted in favor of such proposal.
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Article 5. Indemnity
5.1 In the event that the Parties guarantee any loans on behalf of XXX and
such guarantee is joint or joint and several, then the Parties hereby
agree to indemnity any Party who is required to make payments pursuant
to the guarantee to the extent that it makes payments in excess of its
proportionate share of the guaranteed amount.
5.2 It is the intent of the Parties that the participation and liability of
any guaranteed amount as between the Parties themselves shall be in
proportion to the respective number of issued and outstanding XXX
Shares owned by the Party.
5.3 As used herein, the term "guaranteed amount" shall mean the principal
amount of the loan, including any interest thereon, which is jointly or
jointly and severally guaranteed by the Parties.
Article 6. Additional Capital Contributions or Loans to XXX
6.1 For purposes of this Article 6, each Party has contributed or has been
deemed to contribute to XXX the amount set forth in Exhibit A hereto.
6.2 From and after the Effective Date of this Agreement, AAE agrees to lend
to XXX such amounts and at such times as may be necessary to fund the
work programs required under the License and the Contracts as well as
to fund other operating expenses of XXX in an aggregate amount not to
exceed four million Dollars ($4,000,000). This loan will bear interest
at the rate of eight percent (8%) per annum and will be repayable out
of the proceeds of oil sales in accordance with the terms of the Loan
Agreement attached hereto as Exhibit B.
6.3 Any additional funding that is required by XXX in excess of the
$4,000,000 referred to in Article 6.2 above shall be contributed by the
Parties pro rata to their shareholding in XXX. If one of the Parties
fails to pay, when due, its pro rata share of the required amounts,
such Party shall be in default under this Agreement ("Defaulting
Party"). The non-Defaulting Party shall promptly give notice of such
default to the Defaulting Party (the "Default Notice"). The amount not
paid by the Defaulting Party shall bear interest from the date due
until paid in full at the Agreed Interest Rate.
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6.4 If the Defaulting Party fails to remedy its default by the fifteenth
(15th) day following the date of the Default Notice, then without
prejudice to any other rights available to the non-Defaulting Party to
recover amounts owing to it under this Agreement, the non-Defaulting
Party shall have the option, exercisable at anytime thereafter, to have
its percentage shareholding in XXX recalculated as follows: The
Defaulting Party's percentage shareholding will be reduced to that
percentage resulting from dividing such Defaulting Party's net capital
contributions by the aggregate net capital contributions of both the
Defaulting and Non-Defaulting Parties. For purposes of this
calculation, the term "net capital contributions" shall mean that
amount shown on Exhibit A plus any additional amounts in excess of the
$4,000,000 referred to in Article 6.2 contributed to the capital of XXX
as either loans or as equity, less the amount of any such loans which
are repaid or the amount of any such equity which is redeemed. The
percentage shareholding of the non-Defaulting Party shall be increased
by a like amount.
6.5 The Parties agree that the non-Defaulting Party shall be issued such
additional number of XXX Shares as may be necessary to reflect the
change in such non-Defaulting Party's percentage interest in the
ownership of XXX resulting from the application of the foregoing
formula. The Defaulting Party shall, without delay, following any
request from the non-Defaulting Party, do any and all acts required to
be done and execute any and all documents and take such other actions
as may be necessary in order to effect a prompt and valid issuance of
such additional XXX Shares to the non-Defaulting Party. The acceptance
by non-Defaulting Party of any such additional XXX Shares shall not
limit any rights or remedies that the non-Defaulting Party has to
recover any other amounts (including interest) that may be owing under
this Agreement, the Stock Purchase Agreement executed by the Parties
and others as of date hereof, or any of the Contracts by the Defaulting
Party.
Article 7. Term
7.1 Except as otherwise provided in Article 7.2 below, this Agreement shall
continue for as long as both Parties remain as shareholders in XXX.
7.2 This Agreement shall automatically terminate upon the happening of any
of the following contingencies:
(A) Dissolution of XXX;
(B) The consummation of any merger or consolidation to which XXX
is a party, unless immediately following such merger or
consolidation, the Parties shall own all of the voting power
of the outstanding capital stock of the surviving or resulting
company;
(C) The unanimous written consent of both Parties to the
termination of this Agreement;
(D) Commencement by XXX of a voluntary bankruptcy which proceeding
results in the Parties being required to relinquish control
over the day to day affairs and/or operations of XXX;
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(E) The granting of relief against XXX in an involuntary
bankruptcy proceeding; or
(F) An assignment for the benefit of creditors made by XXX which
results in the Parties being required to relinquish control
over the day to day affairs and/or operations of XXX.
(G) If one or both Parties take title to their interests in the
Contracts and Licenses directly.
Article 8. Notices
8.1 Except as otherwise specifically provided, all notices authorized or
required between the Parties by any of the provisions of this
Agreement, shall be in writing, in English and delivered in person or
by courier service or by any electronic means of transmitting written
communications which provides written confirmation of complete
transmission, and addressed to such Parties as designated below. Oral
communication does not constitute notice for purposes of this
Agreement, and telephone numbers for the Parties are listed below as a
matter of convenience only. The originating notice given under any
provision of this Agreement shall be deemed delivered only when
received by the Party to whom such notice is directed, and the time for
such Party to deliver any notice in response to such originating notice
shall run from the date the originating notice is received. Each Party
shall have the right to change its address at any time and/or designate
that copies of all such notices be directed to another person at
another address, by giving written notice thereof to the other Party.
If to Anglo-African Energy, Inc.:
Anglo-African Energy, Inc.
00 Xxxxxx Xxxx Xxxx
Xxxx xx Xxxxx
Trinidad, W.I.
Attention: Xxxxx X. Xxxxxxx
Telephone: To be advised
Telecopier: To be advised
With a copy to:
Xxxxxx Xxxxx Berlin & Xxxxxxx, LLP
0 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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If to Trans Dominion Holdings Limited:
Trans Dominion Holdings Limited:
Piermont House
00/00 Xxxx Xxxx
Xx. Xxxxxx
Xxxxxx
Xxxxxxx Xxxxxxx
XX0 0XX
Fax: x00-0000-00000
Attn: Xxxxxx Xxxxxxx
With a copy to:
Madison Oil Company
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
With a further copy to:
Xxxxxxx Xxxxxx
000 Xxxx Xxxxxx X, Xxxxx 0000
Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxx Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Article 9. Applicable Law and Dispute Resolution
9.1 This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of New York without giving effect to any
choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New
York.
9.2 Any dispute, controversy or claim arising out of or in relation to or
in connection with this Agreement including without limitation any
dispute as to the construction, validity, interpretation,
enforceability or breach of this Agreement that is not otherwise
resolved through negotiation shall be exclusively and finally settled
by arbitration, and any Party may submit such a dispute, controversy or
claim to arbitration. If the claims giving rise to the arbitration is
the direct result of and/or is based on the identical claims submitted
for adjudication in an arbitration arising out of an agreement to which
one of the Parties is a party, then the claims arising under this
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Agreement shall be submitted for adjudication in such other arbitration
proceeding. If such is not the case, or if the arbitrators in the other
arbitration proceeding can not or will not take jurisdiction of such
claims, then the following provisions shall apply to any arbitration
proceeding instituted under this Agreement.
9.3 A single arbitrator shall be appointed by unanimous consent of the
Parties. If the Parties cannot reach agreement on an arbitrator within
thirty (30) days of the submission of a Notice of Arbitration, the
appointing authority shall be the American Arbitration Association,
which shall appoint an independent arbitrator who does not have any
financial interest in the dispute, controversy or claim.
9.4 Unless otherwise expressly agreed to in writing by the parties to the
arbitration proceedings:
(A) The arbitration proceedings shall be held in New York, New York;
(B) The arbitrator shall be and remain at all times wholly independent
and impartial;
(C) The arbitration proceedings shall be governed by the U.S.
Arbitration Act, 9 U.S.C. Sections 1-16, and be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association then in effect;
(D) Any procedural issues not determined under the arbitral rules
selected pursuant to this Agreement shall be determined by the law of
the place of arbitration, other than those laws which would refer the
matter to another jurisdiction;
(E) Each party shall be responsible for its own costs of the
arbitration proceedings (including attorneys fees and costs); and
(F) Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.
Article 10. Miscellaneous
10.1 Unless otherwise unanimously agreed by the Parties, XXX will engage
only in exploration and production activities, including related
storage and transportation functions.
10.2 AAE and TDH will each have the right, but not the obligation, to enter
into other petroleum activities in Trinidad and Tobago in addition to
the Licenses as well as non-petroleum related projects and activities,
all exclusive of XXX.
10.3 If one or both Parties wish to hold all of their interests in the
Licenses and the Contracts directly rather than through XXX, the
Parties agree to cooperate with each other and to execute all necessary
documentation in a timely manner to achieve such result in an
appropriate manner consistent with applicable laws and
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regulations, the terms of the Licenses and all necessary Government
approvals, including without limitation, the approval of Petrotrin.
10.4. In the event that the Parties wish to transfer an interest in XXX to a
third party (or if they hold their interests in the Licenses directly,
an interest in the Licenses), then each Party shall reduce its interest
either in XXX or in the Licenses, as the case may be, pro-rata.
10.5 Headings and titles are for convenience or reference only and shall not
control the construction or interpretation of any provision hereof.
10.6 The Parties agree that the management costs of XXX and charges made to
XXX by the Parties or their Affiliates shall be fair and reasonable.
All such charges shall be subject to audit by either Party at such
Party's sole expense. If there is a disagreement with regard to the
charges being made by one of the Parties, then the provisions of the
Accounting Procedure of the Joint Operating Agreement shall govern.
10.7 TDH shall on request, be entitled to copies of all data of XXX
including, but not limited to, financial and accounting information,
seismic data and interpretations, well logs and reports and any other
technical data or reports, contracts and agreements. The Parties agree
that the confidentiality provisions of the Joint Operating Agreement
shall govern the use of all such information and data. The cost of
copying any such information hereunder, shall be at the sole expense of
TDH.
10.8 All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of
the person or persons or entity or entities may require. Each defined
term herein may be used in either the singular or plural form whether
or not so defined.
10.9 This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and no interpretation, change,
termination or waiver of, or extension of time for performance under,
any provision of the Agreement shall be binding upon any party unless
in writing and signed by the party intended to be bound thereby.
10.10 No waiver of or failure to exercise any right under, or default or
extension of time for performance under, any provision of this
Agreement shall affect the right of any party to exercise any
subsequent right under or otherwise enforce said provision or any other
provision hereof or to exercise any right or remedy in the event of any
other default whether or not similar.
10.11 In case any one or more of the provisions contained in this Agreement
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired
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thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute for such
invalid or unenforceable provision in light of the tenor of this
Agreement, and, upon so agreeing, shall incorporate such substitute
provision in this Agreement.
10.12 This Agreement may be executed in one or more counterparts, all of
which together shall constitute a single instrument. Each counterpart
shall constitute an original, any one of which may be introduced in
evidence or used for any other purposes without production of its
duplicate counterpart.
10.13 The Parties shall execute and deliver all such future instruments and
take such other and further action as may be reasonably necessary or
appropriate to carry out the provisions of this Agreement and the
intention of the Parties as expressed herein.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
Anglo-African Energy, Inc. Trans-Dominion Holdings Limited
By: /s/ XXXXX X. XXXXXXX By: /s/ J. XXXXXX XXXXXXXX
------------------------------- ---------------------------------
Xxxxx X. Xxxxxxx J. Xxxxxx Xxxxxxxx
President Pres & CEO
LIST OF EXHIBITS
Exhibit A Shareholdings and Initial Capital Contributions
Exhibit B Loan Agreements
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EXHIBIT A
SHAREHOLDERS AGREEMENT
BETWEEN
ANGLO-AFRICAN ENERGY, INC.
AND
TRANS-DOMINION HOLDING LIMITED
Capital Contribution For
Shareholder XXX Shares Owned Purposes of Article 6
----------- ---------------- ------------------------
Anglo-African Energy, Inc. 7,500 US$3,000,000
Trans-Dominion Holdings Limited 2,500 US$1,000,000
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