EXHIBIT 2.02
FORM OF DEBENTURE PURCHASE AGREEMENT
THIS DEBENTURE PURCHASE AGREEMENT (this "Agreement") made and entered into
as of June 24, 1998 by and among AVIVA PETROLEUM INC., a Texas corporation (the
"Acquiror"), and each of the holders of the Debentures (as hereinafter defined)
of Garnet Resources Corporation, a Delaware corporation (the "Company") whose
name is set forth on the signature page hereto (individually, a "Seller", and,
collectively, the "Sellers").
RECITALS:
In December 1993, the Company issued $15,000,000 in aggregate principal
amount of its 9 1/2% Convertible Subordinated Debentures due December 21, 1998
(the "Debentures").
The Sellers own of record and beneficially all of the outstanding
Debentures, and such Debentures are owned of record and beneficially by the
Sellers in the respective amounts set forth on Appendix I attached hereto.
The Acquiror and the Company have entered into an Agreement and Plan of
Merger (the "Merger Agreement") of even date herewith providing for the merger
of a wholly owned subsidiary of the Acquiror with and into the Company (the
"Merger") pursuant to which the outstanding common stock of the Company will be
converted into shares of common stock of the Acquiror and the Company will
become a wholly owned subsidiary of the Acquiror.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are conditions precedent to the obligation of
the Acquiror to consummate the Merger.
The Sellers desire to sell, and the Acquiror desires to purchase, all of
the outstanding Debentures in exchange for common stock of the Acquiror on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto, for and in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, do hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Certain capitalized and other terms used in
this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
SECTION 1.2 Rules of Construction. Unless the context otherwise requires,
as used in this Agreement: (a) a term has the meaning ascribed to it; (b) an
accounting term not otherwise defined has the meaning ascribed to it in
accordance with GAAP; (c) "or" is not exclusive; (d) "including"
means "including without limitation;" (e) words in the singular include the
plural; (e) words in the plural include the singular; (f) words applicable to
one gender shall be construed to apply to each gender; (g) the terms "hereof,"
"herein," "hereby," "hereto" and derivative or similar words refer to this
entire Agreement; (h) the terms "Article" or "Section" shall refer to the
specified Article or Section of this Agreement; and (i) the phrase "oil and gas
properties of [the Company or the Acquiror]" or any variant thereof shall
include the oil and gas properties of a Subsidiary of such Person.
ARTICLE II
SALE OF DEBENTURES IN EXCHANGE FOR COMMON STOCK
SECTION 2.1 Purchase and Exchange.
(a) At the Closing, each of the Sellers will sell, transfer,
convey and deliver to the Acquiror, and the Acquiror will purchase, the
principal amount of the outstanding Debentures set forth opposite such
Seller's name on Appendix I hereto, as evidenced by the delivery of a
certificate or certificates evidencing such Debentures, accompanied by duly
executed bond or debenture powers. In exchange therefor, the Acquiror will
issue and convey such number of shares of Acquiror Common Stock as shall be
set forth opposite the name of such Seller on Appendix I hereto.
(b) The shares of Acquiror Common Stock to be delivered by the
Acquiror at the Closing will, to the extent that the aggregate number of
such shares of Acquiror Common Stock to be delivered to an individual
Seller is evenly divisible by five (5), be represented by Depositary
Receipts. Prior to the Closing Date and subject to consummation of the
Closing, the Acquiror shall deposit with the Depositary, for the account of
each individual Seller, the number of shares of Acquiror Common Stock set
forth on Appendix I hereto opposite such Seller's name that is evenly
divisible by five (5), shall obtain in exchange therefor Depositary
Receipts registered in the name of such individual Seller evidencing
Depositary Shares on the basis of one (1) Depositary Share for each five
(5) shares of Acquiror Common Stock so deposited and shall deliver such
Depositary Receipts at the Closing. To the extent that the number of shares
of Acquiror Common Stock set forth opposite the name of any Seller on
Appendix I is not evenly divisible by five (5), the Acquiror shall at the
Closing deliver a certificate, registered in the name of such Seller, for
the remaining number of shares of Acquiror Common Stock. The delivery of
such Depositary Receipts and, if applicable, the certificate for the
remaining shares of Acquiror Common Stock at the Closing shall constitute
delivery of the Acquiror Common Stock to which each such Seller shall be
entitled pursuant to the provisions of subsection (a) of this Section 2.1.
SECTION 2.2 Interest on Debentures. The parties hereto acknowledge that
the Company has paid no interest on the Debentures since December 31, 1997 and
that they do not anticipate that the Company will pay any such interest prior to
the Closing hereunder. The parties hereto further acknowledge and agree that
the purchase and sale of the Debentures pursuant to this Agreement shall include
all rights of the holders of the Debentures to accrued but unpaid interest on
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the Debentures and that, from and after the Closing, the current holders shall
have no claim against the Company for any such accrued but unpaid interest.
SECTION 2.3 Sole Obligation is Purchase of All Debentures. The Acquiror
shall have no obligation hereunder to purchase any Debentures unless all the
Debentures are tendered for purchase by the Acquiror at the Closing hereunder.
SECTION 2.4 Closing. The Closing of the sale and purchase of the
Debentures and the issuance of Acquiror Common Stock in exchange therefor shall
take place at the offices of Xxxxxx & Xxxxxx L.L.P., Xxxxxxx Xxxx Center, 0000
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, at 10:00 a.m. on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF EACH SELLER
Each of the Sellers, severally and not jointly, represents and warrants to
the Acquiror as follows with respect only to such Seller:
SECTION 3.1 Authorization of Agreement. Such Seller has all requisite
individual or organizational power and authority, as the case may be, to execute
and deliver this Agreement and each instrument required hereby to be executed
and delivered by it at the Closing, to perform such Seller's obligations
hereunder and thereunder and to consummate the transactions contemplated hereby.
The execution and delivery by such Seller of this Agreement and each instrument
required hereby to be executed and delivered by such Seller at the Closing and
the performance of such Seller's obligations hereunder and thereunder have been
duly and validly authorized by any required organizational action on the part of
such Seller. This Agreement has been duly executed and delivered by such Seller
and (assuming due authorization, execution and delivery hereof by the Acquiror)
constitutes a legal, valid and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms, except as the same may be
limited by legal principles of general applicability governing the application
and availability of equitable remedies.
SECTION 3.2 Approvals. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws and (d) those Laws, Regulations and Orders noncompliance with which
could not reasonably be expected to have a material adverse effect on the
ability of such Seller to perform such Seller's obligations hereunder or a
Material Adverse Effect on the Company, no filing or registration with, no
waiting period imposed by and no Authorization of, any Governmental Authority is
required under any Law, Regulation or Order applicable to such Seller to permit
such Seller to execute, deliver or perform this Agreement or any instrument
required hereby to be executed and delivered by such Seller at the Closing.
SECTION 3.3 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Authorizations of Governmental Authorities
indicated as required in Section 3.2, neither the execution and delivery by such
Seller of this Agreement or any instrument required hereby to be executed and
delivered by such Seller at the Closing nor the performance by such Seller of
such
DEBENTURE PURCHASE AGREEMENT
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Seller's obligations hereunder or thereunder will (a) violate or breach the
terms of or cause a default under any Law, Regulation or Order applicable to
such Seller, any organizational document applicable to such Seller or any
contract or agreement to which such Seller is a party or by which such Seller is
bound or (b), with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
that could not reasonably be expected to have a material adverse effect on the
ability of such Seller to perform such Seller's obligations hereunder or a
Material Adverse Effect on the Company.
SECTION 3.4 Title to Debentures. Such Seller has good title to the
principal amount of Debentures set forth opposite such Seller's name on Appendix
I hereto, free and clear of any Lien, and, upon transfer thereof to the Acquiror
at the Closing pursuant to the terms of this Agreement, the Acquiror will
acquire good title to such principal amount of Debentures, free and clear of any
Lien. The aggregate principal amount of the Debentures set forth on Appendix I
hereto constitutes the entire principal amount of Debentures outstanding.
SECTION 3.5 Brokerage Agreements. Such Seller has not entered (directly
or indirectly) into any agreement under which the Acquiror or the Company could
be liable with any person, firm or corporation providing for the payment of any
commission, brokerage or "finder's fee" in connection with the transactions
contemplated herein.
SECTION 3.6 No Distribution. Each Seller hereby acknowledges that, in
making the offering, sale and delivery of the Acquiror Common Stock pursuant to
this Agreement, the Acquiror is relying on the exemption from the registration
provisions of the Securities Act contained in Section 4(2) thereof, and, to that
end, each Seller represents and warrants that such Seller is a "qualified
investor" within the meaning of that term as defined in Regulation D under the
Securities Act and that such Seller is acquiring the Acquiror Common Stock
without a view to the distribution thereof within the meaning of that term as
used in the Securities Act.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE ACQUIROR
SECTION 4.1 Organization and Qualification. The Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas, has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than any matters, including the failure to be so qualified and in good standing,
that could not reasonably be expected to have a Material Adverse Effect on the
Acquiror.
SECTION 4.2 Authorization of Agreement. The Acquiror has all requisite
corporate power and authority to execute and deliver this Agreement and, subject
to approval of this Agreement by the majority of the stockholders of the
Acquiror as required by the applicable provisions of the LSE and the ASE, each
instrument required hereby to be executed and delivered by it at the Closing, to
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perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Acquiror of
this Agreement and each instrument required hereby to be executed and delivered
by each of them at the Closing and the performance of its obligations hereunder
and thereunder have been duly and validly authorized by all requisite corporate
action on the part of the Acquiror (other than the approval and adoption of this
Agreement by the holders of a majority of the outstanding shares of Acquiror
Common Stock in accordance with the applicable provisions of the LSE and the
ASE). This Agreement has been duly executed and delivered by the Acquiror and
(assuming due authorization, execution and delivery hereof by the other parties
hereto) constitutes a legal, valid and binding obligation of the Acquiror,
enforceable against the Acquiror in accordance with its terms, except as the
same may be limited by legal principles of general applicability governing the
application and availability of equitable remedies.
SECTION 4.3 Approvals. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the LSE, (f) the ASE and (g) those Laws,
Regulations and Orders noncompliance with which could not reasonably be expected
to have a material adverse effect on the ability of the Acquiror to perform its
obligations hereunder or a Material Adverse Effect on the Acquiror, no filing or
registration with, no waiting period imposed by and no Authorization of, any
Governmental Authority is required under any Law, Regulation or Order applicable
to the Acquiror to permit the Acquiror to execute, deliver or perform this
Agreement or any instrument required hereby to be executed and delivered by it
at the Closing. To the Knowledge of the Acquiror and assuming approval of this
Agreement and the transactions contemplated hereby by the holders of a majority
of outstanding Acquiror Common Stock as required by the LSE and the ASE, there
are no facts or circumstances that could reasonably be expected to preclude the
Acquiror Common Stock to be issued in the Merger from being approved for listing
on the LSE or Depositary Shares representing such Acquiror Common Stock from
being approved for listing on the ASE.
SECTION 4.4 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all Authorizations of, Governmental Authorities
indicated as required in Section 3.3, neither the execution and delivery by the
Acquiror of this Agreement or any instrument required hereby to be executed and
delivered by it at the Closing nor the performance by the Acquiror of its
obligations hereunder or thereunder will (a) violate or breach the terms of or
cause a default under any Law, Regulation or Order applicable to the Acquiror,
the certificate of incorporation or bylaws of the Acquiror or any contract or
agreement to which the Acquiror or any of its Subsidiaries is a party or by
which it or any of its properties or assets is bound, or (b), with the passage
of time, the giving of notice or the taking of any action by a third Person,
have any of the effects set forth in clause (a) of this Section, except in any
such case for any matters described in this Section that could not reasonably be
expected to have a material adverse effect on the ability of the Acquiror to
perform its obligations hereunder or a Material Adverse Effect on the Acquiror.
SECTION 4.5 Brokerage Agreements. The Acquiror has not entered (directly
or indirectly) into any agreement under which any Seller could be liable with
any person, firm or corporation providing for the payment of any commission,
brokerage or "finder's fee" in connection with the transactions contemplated
herein.
DEBENTURE PURCHASE AGREEMENT
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ARTICLE V
COVENANTS OF THE SELLERS
Each of the Sellers further agrees, severally and not jointly, except as
set forth in or contemplated by this Agreement or as otherwise approved by the
Acquiror in writing, that from the date hereof through the Closing Date:
SECTION 5.1 Obtaining Consents. Each of the Sellers will use all
reasonable efforts to obtain all consents to the transactions contemplated by
this Agreement required to be obtained from third Persons by the provisions of
any material contracts, franchises, commitments and agreements to which any of
the Sellers is a party or by which such Seller is bound.
SECTION 5.2 Confidentiality. Such Seller will not disclose or use any
information obtained in the course of the negotiation of this Agreement or
otherwise or set forth in any schedule hereto, except (a) in connection with the
performance of this Agreement, (b) as required by any Law, Regulation or Order,
(c) as may be necessary to the prosecution or defense of any claim or suit
brought to enforce rights under this Agreement or (d) to the extent that the
same may become public other than through the action of such Seller. If the
transactions contemplated hereby are not consummated and this Agreement shall
terminate, such Seller will promptly return all copies of documents, contracts
or records and other properties furnished by the Acquiror or its affiliates
pursuant to this Agreement.
SECTION 5.3 Exclusive Agreement. Except to the extent otherwise expressly
contemplated by this Agreement, unless this Agreement is terminated prior to
Closing, such Seller will not directly or indirectly (a) encourage, solicit or
engage in discussions or any negotiations with, or provide any information to,
any Person (other than the Acquiror or affiliates of the Acquiror) concerning
any possible disposition of the Company, any Subsidiary of the Company or any
significant asset of the Company or any of its Subsidiaries (unless and to the
extent that the disposition would be expressly permitted by the Merger
Agreement) or (b) do anything or enter into any agreement or take any action
that by its terms or effect could reasonably be expected to adversely affect the
ability of the parties to consummate the transactions contemplated by this
Agreement or the Merger Agreement on the terms and conditions set forth herein
and therein or that would be contrary to or breach any of the terms or
provisions of this Agreement or the Merger Agreement or that would cause any of
the representations or warranties contained herein or therein to be or become
untrue in any material respect.
SECTION 5.4 Satisfaction of Closing Conditions. Such Seller shall use all
reasonable efforts to satisfy the conditions to Closing set forth in Article VII
relating to such Seller in an expeditious manner.
DEBENTURE PURCHASE AGREEMENT
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SECTION 5.5 Delivery of Documents at Closing. At the Closing, subject to
satisfaction of the conditions set forth in Article VII, such Seller will
execute and deliver to the Acquiror all documents required to be delivered
pursuant to Section 2.1.
ARTICLE VI
COVENANTS OF THE ACQUIROR
The Acquiror further agrees, except as set forth in or contemplated by this
Agreement or as otherwise approved by the Sellers in writing, that from the date
hereof through the Closing Date:
SECTION 6.1 Obtaining Consents. The Acquiror will use all reasonable
efforts to obtain all consents to the transactions contemplated by this
Agreement required to be obtained from third Persons by the provisions of any
material contracts, franchises, commitments and agreements to which the Acquiror
is a party or by which the Acquiror is bound.
SECTION 6.2 Confidentiality. The Acquiror will not disclose or use any
information obtained in the course of the negotiation of this Agreement or
otherwise or set forth in any schedule hereto, except (a) in connection with the
performance of this Agreement, (b) as required by any Law, Regulation or Order,
(c) as may be necessary to the prosecution or defense of any claim or suit
brought to enforce rights under this Agreement or (d) to the extent that the
same may become public other than through the action of the Acquiror. If the
transactions contemplated hereby are not consummated and this Agreement shall
terminate, the Acquiror will promptly return all copies of documents, contracts
or records and other properties furnished by the Sellers pursuant to this
Agreement.
SECTION 6.3 Satisfaction of Closing Conditions. The Acquiror shall use
all reasonable efforts to satisfy the conditions to Closing set forth in Article
VII relating to the Acquiror in an expeditious manner.
SECTION 6.4 Delivery of Documents at Closing. At the Closing, subject to
satisfaction of the conditions set forth in Article VII, the Acquiror will
execute and deliver to the Sellers all documents required to be delivered
pursuant to Section 2.1.
ARTICLE VII
CONDITIONS TO THE CLOSING
SECTION 7.1 Conditions to Obligations of Each Party. The obligations of
the Acquiror and of each Seller to effect the transactions contemplated by this
Agreement are subject to the satisfaction (or waiver in writing by the party
entitled to the benefit thereof) of each of the following conditions:
(a) Third Party Consents. The Acquiror and each of the Sellers shall
have obtained all consents to the transactions contemplated by this
Agreement required to be obtained from third Persons by the provisions of
any contracts, franchises, commitments and agreements to which the Acquiror
or any of the Sellers is a party or by which the Acquiror
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or any such Seller is bound if the failure to obtain such consent could
reasonably be expected to have, in the case of the Acquiror, a Material
Adverse Effect on the Acquiror or, in the case of any Seller, a Material
Adverse Effect on such Seller.
(b) Statutory Requirements. All statutory requirements for the valid
consummation of the transactions contemplated herein shall have been
fulfilled and all necessary Authorizations from Governmental Authorities
shall have been obtained.
(c) No Order. No Court or Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law, Regulation or Order
(whether temporary, preliminary or permanent) that is in effect and has the
effect of making the transactions contemplated hereby illegal or otherwise
prohibiting consummation of the transactions contemplated hereby.
SECTION 7.2 Conditions to Obligation of the Acquiror. The obligation of
the Acquiror to effect the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver in writing by the Acquiror) of each of
the following conditions:
(a) Accuracy of Representations and Warranties of the Sellers. The
representations and warranties of the Sellers hereunder shall be made again
at the Closing and shall, except to the extent expressly contemplated by
this Agreement, be true and correct as of the Closing, (ii) the Sellers
shall have performed all covenants required to be performed by them under
this Agreement as of the Closing and (iii) the Sellers shall have furnished
the Acquiror at the Closing with a certificate of the Sellers to such
effect, as well as to the effect that all of the conditions contemplated by
this Section 7.2 have been satisfied as of the Closing Date.
(b) Certificates. Each of Sellers shall have delivered to the
Acquiror at the Closing one or more certificates evidencing the Debentures
to be delivered by such Seller at the Closing, such certificates being in
good delivery form and accompanied by duly executed debenture or bond
powers; such certificates shall, in the aggregate, evidence all the
outstanding Debentures.
(c) Merger Agreement. All the conditions precedent to consummation of
the Merger set forth in the Merger Agreement shall have been fulfilled or
waived.
SECTION 7.3 Conditions to Obligations of the Sellers. The obligations of
each of the Sellers to effect the transactions contemplated by this Agreement
shall be subject to the satisfaction (or waiver in writing by each of the
Sellers) of each of the following conditions:
(a) Representations and Warranties of the Acquiror to Be True. (i) The
representations and warranties of the Acquiror hereunder shall be made
again at the Closing and shall be true and correct as of the Closing,
except to the extent expressly contemplated by this Agreement, (ii) the
Acquiror shall have performed all covenants required to be performed by it
under this Agreement as of the Closing and (iii) the Acquiror shall have
furnished the Sellers at the Closing with a certificate of an executive
officer of the Acquiror
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to such effect, as well as to the effect that all of the conditions
contemplated by this Section 7.3 have been satisfied as of the Closing
Date.
(b) Issuance of Acquiror Common Stock. The Acquiror shall have
delivered the certificates evidencing the Acquiror Common Stock to be
issued by it pursuant to Section 2.1 herein in exchange for the Debentures
registered in the names of the Sellers, in each case in the respective
amounts set forth on Appendix I.
ARTICLE VIII
SECTION 8.1 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated herein may be
terminated at any time before the Closing as follows:
(a) By the mutual consent of the Acquiror and a Majority of the
Sellers.
(b) by the Acquiror, upon a Material breach of any representation,
warranty, covenant or agreement on the part of any of the Sellers set forth
in this Agreement or if any representation or warranty of any of the
Sellers shall have become untrue in any Material respect, in either case
such that the conditions set forth in Section 7.2(a) would not be satisfied
(a "Terminating Seller Breach"); provided that, if such Terminating Company
Breach is curable by the affected Seller or Sellers through the exercise of
reasonable efforts and for so long as the Seller or Sellers continue to
exercise such reasonable efforts, the Acquiror may not terminate this
Agreement under this Section 8.1(b);
(c) by a Majority of the Sellers, upon a Material breach of any
representation, warranty, covenant or agreement on the part of the Acquiror
set forth in this Agreement or if any representation or warranty of the
Acquiror shall have become untrue in any Material respect, in either case
such that the conditions set forth in Section 7.3(a) would not be satisfied
(a "Terminating Acquiror Breach"); provided that, if such Terminating
Acquiror Breach is curable by the Acquiror through the exercise of its
reasonable efforts and for so long as the Acquiror continues to exercise
such reasonable efforts, the Sellers may not terminate this Agreement under
this Section 8.1(c);
(d) by either the Acquiror or a Majority of the Sellers, if there
shall be any final and nonappealable Order that prevents the consummation
of the Merger or the transactions contemplated by this Agreement;
(e) by a Majority of the Sellers or by the Acquiror if the
transactions contemplated hereby shall not have been consummated before
September 30, 1998; provided, however, that this Agreement may be extended
by written notice of the Acquiror to a date not later than October 31,
1998, if the Merger Agreement shall have been extended to that date
pursuant to the provisions of Section 9.01(e) thereof; provided, however,
that no party hereto can terminate this Agreement pursuant to this
subsection 8.1(e) if at such time such party is in violation of or has
breached any provision of this Agreement.
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(f) by either the Acquiror or a Majority of the Sellers, if the Merger
Agreement shall fail to receive the Required Company Vote by the
stockholders of the Company at the Company Stockholders' Meeting;
(g) by either the Acquiror or a Majority of the Sellers, if the Merger
Agreement or this Agreement shall fail to receive the Required Acquiror
Vote by the stockholders of the Acquiror at the Acquiror Stockholders'
Meeting;
(h) by either the Acquiror or a Majority of the Sellers, if the Merger
Agreement is terminated in accordance with its terms.
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of its respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 8.2 Effect of Termination. Except as provided in Section 9.1 of
this Agreement, in the event of the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void, there shall be no
liability on the part of the Acquiror or any of the Sellers or any of its
officers or directors to the other and all rights and obligations of any party
hereto shall cease, except that nothing herein shall relieve any party from
liability for any misrepresentation or breach of any covenant or agreement under
this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Effectiveness of Representations, Warranties and Agreements.
-----------------------------------------------------------
(a) Except as set forth in Section 9.1(b) of this Agreement, the
representations, warranties, covenants and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any Person
controlling any such party or any of their officers, directors,
representatives or agents whether prior to or after the execution of this
Agreement.
(b) The representations and warranties in this Agreement shall
terminate at the Closing and the representations, warranties, covenants and
agreements of each of the parties hereto shall terminate upon the
termination of this Agreement pursuant to Section 8.1, except that the
covenants and agreements set forth in Section 8.2 and in this Article IX
hereof shall survive such termination of this Agreement.
SECTION 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses or sent by electronic transmission to the telecopier number specified
below:
DEBENTURE PURCHASE AGREEMENT
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(a) If to the Acquiror, to:
Aviva Petroleum Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx, President and Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx III
Telecopier No.: (000) 000-0000
(b) If to any Seller, to the address or telecopier number set forth
beneath such Seller's name on Appendix I.
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed delivered on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee. Notice given by mail as set out above shall be deemed delivered
three days after the date the same is postmarked.
SECTION 9.3 Mutual Releases.
(a) Subject to the consummation of the transaction contemplated
hereby, each of the Sellers, for himself and anyone or any entity claiming by,
through or under him, hereby fully and irrevocably releases and forever
discharges the Company, Argosy Energy Incorporated, a Delaware corporation
("Argosy"), Argosy Energy International, Ltd., a Utah limited partnership (the
"Partnership") and their past, present and future officers, directors,
employees, agents, shareholders, partners, principals and other affiliates from
any and all past, present and future debts, claims, demands, obligations,
liabilities, damages, actions, and causes of action of every kind whatsoever (a
"Claim"), whether now known or not, and whether now accrued or not, and in
whatever legal theory or form, based in whole or in part upon any conduct, act
and/or omission that has occurred or is alleged to have occurred at any time
prior to the date hereof, arising out of or relating to the Debentures, the
Merger, the Merger Agreement, any of the transactions contemplated thereby, or
the business or affairs of the Acquiror or the Company.
(b) Subject to the consummation of the transaction contemplated hereby
and the Merger, the Acquiror hereby agrees to cause the Company, Argosy and the
Partnership, for itself and anyone or any entity claiming by, through or under
it, to release fully and irrevocably and to discharge forever each of the
Sellers from any and all Claims, whether now known or not, and whether now
accrued or not, and in whatever legal theory or form, based in whole or in part
upon
DEBENTURE PURCHASE AGREEMENT
11
any conduct, act and/or omission that has occurred or is alleged to have
occurred at any time prior to the date hereof, arising out of or relating to the
Debentures, the Merger, the Merger Agreement, any of the transactions
contemplated thereby, or the business or affairs of the Acquiror or the Company.
(c) The mutual releases contained in this Agreement shall not be
construed to release any party from a Claim that such party has breached its
obligations under this Agreement.
SECTION 9.4 Expenses. Each party hereto shall bear its own legal,
accounting and other costs and expenses incident to the negotiation of this
Agreement and the performance of the transactions contemplated herein.
SECTION 9.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 9.7 Entire Agreement. This Agreement (together with Annex A,
Appendix I, the Company's Disclosure Letter and the Acquiror's Disclosure
Letter) constitutes the entire agreement of the parties, and supersedes all
prior agreements and undertakings, both written and oral, among the parties,
with respect to the subject matter hereof.
SECTION 9.8 Assignment. This Agreement shall not be assigned by the
Acquiror or any of the Sellers, except, in the case of any of the Sellers,
without the prior written consent of the Acquiror.
SECTION 9.9 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and their successors,
heirs and representatives, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 9.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and remedies existing under this Agreement are cumulative with, and not
exclusive of, any rights or remedies otherwise available.
SECTION 9.11 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Texas, regardless of the
Laws that might otherwise govern
DEBENTURE PURCHASE AGREEMENT
12
under applicable principles of conflicts of law; provided, however, that any
matter involving the internal corporate affairs of the Company or Newco shall be
governed by the provisions of the GCL.
SECTION 9.12 Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to this Agreement to perform its agreements
and covenants hereunder, including its failure to take all actions as are
necessary on its part to the consummation of the Merger, will cause irreparable
injury to the other parties to this Agreement for which damages, even if
available, will not be an adequate remedy. Accordingly, each of the parties
hereto hereby consents to the granting of equitable relief (including specific
performance and injunctive relief) by any court of competent jurisdiction to
enforce any party's obligations hereunder. The parties further agree to waive
any requirement for the securing or posting of any bond in connection with the
obtaining of any such equitable relief and that this Section is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
SECTION 9.13 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.14 Arbitration. Any dispute hereunder between the Acquiror, on
the one hand, and the Sellers, on the other, shall be resolved by binding
arbitration under the Commercial Arbitration Rules (the "AAA Rules") of the
American Arbitration Association (the "AAA"). This arbitration provision is
expressly made pursuant to and shall be governed by the Federal Arbitration Act,
9 U.S.C. Sections 1-14. The parties hereto agree that, pursuant to Section 9 of
the Federal Arbitration Act, a judgment of a United States District Court of
competent jurisdiction shall be entered upon the award made pursuant to the
arbitration. Three arbitrators, who shall have the authority to allocate the
costs of any arbitration initiated under this paragraph, shall be selected
according to the AAA Rules or, if such AAA Rules do not so provide, then in
accordance with the following sentence within ten (10) days of the submission to
the AAA of the response to the statement of claim or the date on which any such
response is due, whichever is earlier. The alternative selection shall be made
as follows: one by a Majority of the Sellers, one by the Acquiror and one by the
two so selected. The arbitrators shall conduct the arbitration in accordance
with the Federal Rules of Evidence. The arbitrators shall decide the amount and
extent of pre-hearing discovery which is appropriate. The arbitrators shall
have the power to enter any award of monetary or injunctive relief (including
the power to issue permanent injunctive relief and also the power to reconsider
any prior request for immediate injunctive relief by either of the parties and
any order as to immediate injunctive relief previously granted or denied by a
court in response to a request therefor by either of the parties), including the
power to render an award as provided in Rule 43 of the AAA Rules; provided,
however, that the arbitrators shall not have the power to award punitive damages
under any circumstances (whether styled as punitive, exemplary, or treble
damages, or any penalty or punitive type of damages) regardless of whether such
damages may be available under applicable law, the parties hereby waiving their
rights, if any, to recover any such damages, whether in arbitration or
litigation. The arbitrators shall award the prevailing party its costs and
reasonable attorney's fees, and the losing party shall bear the entire cost of
the arbitration, including the arbitrators' fees. The arbitration award may be
enforced in any court having jurisdiction over the parties and the subject
matter of the arbitration. The arbitration shall be held in Dallas, Texas.
DEBENTURE PURCHASE AGREEMENT
13
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first above written.
AVIVA PETROLEUM INC.
By:
--------------------------------------------
Name:
Title:
SELLER:
------------------------------------------------
[Insert Name]
------------------------------------------------
[Insert Reference # from Appendix I]
By:
--------------------------------------------
Its:
--------------------------------------------
DEBENTURE PURCHASE AGREEMENT
14
APPENDICES, EXHIBITS AND SCHEDULES
Annex A Definitions
Appendix I Ownership of Debentures; Acquiror Common Stock Issuable
DEBENTURE PURCHASE AGREEMENT
ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings set
forth below unless the context shall otherwise require:
"Acquiror" shall mean Aviva Petroleum Inc., a Texas corporation, and its
successors from time to time.
"Acquiror Common Stock" shall mean the common stock, without par value, of
the Acquiror.
"Affiliate" shall, with respect to any Person, mean any other Person that
controls, is controlled by or is under common control with the former.
"ASE" shall mean the American Stock Exchange.
"Business Day" means any day other than a day on which banks in the State
of Texas are authorized or obligated to be closed;
"Closing" shall mean a meeting, which shall be held in accordance with
Section 2.4, of representatives of the parties to the Agreement at which, among
other things, all documents deemed necessary by the parties to the Agreement to
evidence the fulfillment or waiver of all conditions precedent to the
consummation of the transactions contemplated by the Agreement are executed and
delivered.
"Closing Date" shall mean the same date as the Closing Date under the
Merger Agreement.
"Company" shall mean Garnet Resources Corporation, a Delaware corporation,
and its successors from time to time.
"Company Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
"control" (including the terms "controlled," "controlled by" and "under
common control with") means (except where another definition is expressly
indicated) the possession, directly or indirectly or as trustee or executor, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock or as trustee or executor, by
contract or credit arrangement or otherwise.
"Court" shall mean any court or arbitration tribunal of the United States,
any foreign country or any domestic or foreign state, and any political
subdivision thereof, and shall include the European Court of Justice.
DEBENTURE PURCHASE AGREEMENT
"Debenture" or "Debentures" shall mean $15,000,000 in aggregate principal
amount of the Company's outstanding 9-1/2% Convertible Subordinated Debentures
due December 21, 1998.
"Deposit Agreement" shall mean that certain Deposit Agreement dated as of
September 15, 1994 between the Acquiror and the Depositary relating to the
issuance of Depositary Shares in exchange for shares of Acquiror Common Stock.
"Depositary" shall mean ChaseMellon Shareholder Services Group, L.L.C., as
Depositary under the Deposit Agreement.
"Depositary Receipts" shall mean the depositary receipts issued by the
Depositary pursuant to the Deposit Agreement to evidence the Depositary Shares.
"Depositary Shares" shall mean the Depositary Shares issued by the
Depositary pursuant to the Deposit Agreement to holders of Acquiror Common
Stock in exchange for the deposit of shares of Acquiror Common Stock with the
Depositary on the basis of five shares of Acquiror Common Stock for one
Depositary Share.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"GAAP" shall mean accounting principles generally accepted in the United
States as in effect from time to time consistently applied by a specified
Person.
"GCL" shall mean the General Corporation Law of the State of Delaware, as
in effect on the date of this Agreement and from time to time thereafter during
the pendency hereof.
"IRS" shall mean the Internal Revenue Service.
"LSE" shall mean the London Stock Exchange Limited.
"Majority of the Sellers" shall mean those Sellers who own a majority in
principal amount of the Debentures.
"Merger" shall mean the merger of Newco with and into the Company as
provided in Article II of this Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger made and
entered into as of June 24, 1998 among the Acquiror, Newco and the Company,
including any amendments thereto and each Annex (including Annex A) and Schedule
thereto (including the Acquiror's Disclosure Letter and the Company's Disclosure
Letter).
"Newco" shall mean Aviva Merger Inc., a Delaware corporation and an
indirect, wholly owned Subsidiary of the Acquiror.
"Partnership" shall mean Argosy Energy International, L.P., a Utah limited
partnership.
DEBENTURE PURCHASE AGREEMENT
"Person" shall mean an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, or any other form of business or professional
entity, but shall not include a Court or Governmental Authority.
"Securities Act" shall mean the Securities Act of 1933, as amended.
A "Subsidiary" of a specified Person shall be any corporation, partnership,
limited liability company, joint venture or other legal entity of which the
specified Person (either alone or through or together with any other Subsidiary)
owns, directly or indirectly, 50% or more of the stock or other equity or
partnership interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity or of which the specified Person controls the
management.
"TBCA" shall mean the Texas Business Corporation Act, as in effect on the
date of this Agreement and from time to time thereafter during the pendency
hereof.
"Terminating Acquiror Breach" shall have the meaning ascribed to such term
in Section 9.10(c) of the Agreement.
"Terminating Seller Breach" shall have the meaning ascribed to such term in
Section 8.1(b) of the Agreement.
DEBENTURE PURCHASE AGREEMENT
APPENDIX I
--------------------------------------------------------------------------------
GARNET RESOURCES CORPORATION
9.5% CONVERTIBLE SUBORDINATED DEBENTURE HOLDERS
--------------------------------------------------------------------------------
BENEFICIAL HOLDER REF# AMOUNT SHARES
--------------------------------------------------------------------------------
DELAWARE STATE EMPLOYEES
RETIREMENT FUND R1 4,000,000 3,436,739
ICI AMERICAN HOLDINGS INC. R4 1,200,000 1,031,022
ZENECA HOLDINGS, INC. R9 800,000 687,348
--------------------------------------------------------------------------------
NOTICE ADDRESS:
Xx. Xxx Xxxxxx
Pecks Management Partners Ltd.
Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
--------------------------------------------------------------------------------
SUB-TOTAL 6,000,000 5,155,108
--------------------------------------------------------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE CO. R5 750,000 644,389
MASSMUTUAL CORPORATE
INVESTORS R6 500,000 429,592
MASSACHUSETTS MUTUAL
CORPORATE SEGMENT R7 750,000 644,389
--------------------------------------------------------------------------------
NOTICE ADDRESS:
Xx. Xxxxx Xxxxxx
Massachusetts Mutual Insurance Co.
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
--------------------------------------------------------------------------------
SUB-TOTAL 2,000,000 1,718,369
--------------------------------------------------------------------------------
CORNING INC. PENSION PLAN R11 200,000 171,837
--------------------------------------------------------------------------------
NOTICE ADDRESS:
Xx. Xxx Xxxxxx
MP HQ EZ DD 23
Corning Incorporated
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
--------------------------------------------------------------------------------
SUB-TOTAL 670,000 575,654
--------------------------------------------------------------------------------
|---------------------------------------------------------------|----------------|------------------|----------------|
|XXXXXXXX XXXXX RETIREMENT TRUST a/c 308316 | R12 | 300,000 | 257,755 |
|---------------------------------------------------------------|----------------|------------------|----------------|
|NOTICE ADDRESS: | | | |
| | | | |
|Mr. Xxxxxx Xxxxxxx | | | |
|Xxxxxxxx-Xxxxx Corp. | | | |
|351 Xxxxxx Drive | | | |
xXxxxxx, XX 00000 | | | |
|Tel.: (000) 000-0000 Fax: (000)000-0000 | | | |
|---------------------------------------------------------------|----------------|------------------|----------------|
|LAFAYETTE UNIVERSITY | R13 | 170,000 | 146,061 |
|---------------------------------------------------------------|----------------|------------------|----------------|
|NOTICE ADDRESS: | | | |
| | | | |
|Xx. Xxxx Xxxxxxxxx | | | |
|Institutional Capital Corp. | | | |
|225 Xxxx Xxxxxx Xxxxx, #0000 | | | |
xXxxxxxx, XX 00000 | | | |
|Tel.: (000) 000-0000 Fax: (000) 000-0000 | | | |
|---------------------------------------------------------------|----------------|------------------|----------------|
| SUB-TOTAL | | 670,000 | 575,654 |
|---------------------------------------------------------------|----------------|------------------|----------------|
| | | | |
|WEXFORD SPECIAL SITUATIONS 1996 L.P. | R21 | 1,007,100 | 865,285 |
|WEXFORD SPECIAL SITUATIONS 1996 INSTITUTIONAL L.P. | R22 | 184,800 | 158,777 |
|WEXFORD EURIS SPECIAL SITUATIONS 1996 1 | R23 | 257,550 | 221,283 |
|WEXFORD SPECIAL SITUATIONS 1996 LTD | R24 | 50,550 | 43,432 |
|WEXFORD SPECIAL SITUATIONS 1996 L.P. | R25 | 3,242,862 | 2,786,218 |
|WEXFORD SPECIAL SITUATIONS 1996 INSTITUTIONAL L.P. | R26 | 595,056 | 511,263 |
|WEXFORD EURIS SPECIAL SITUATIONS 1996 L.P. | R27 | 829,311 | 712,531 |
|WEXFORD SPECIAL SITUATIONS 1996 LTD | R28 | 162,771 | 139,850 |
| | | | |
| | | | |
|---------------------------------------------------------------|----------------|------------------|----------------|
|NOTICE ADDRESS: | | | |
| | | | |
|Xx. Xxxx Strechler | | | |
|Wexford Management, L.L.C. | | | |
|411 X. Xxxxxx Avenue | | | |
xXxxxxxxxx, XX 00000 | | | |
|Tel.: (000) 000-0000 Fax: (000) 000-0000 | | | |
|---------------------------------------------------------------|----------------|------------------|----------------|
| SUB-TOTAL | | 6,330,000 | 5,438,639 |
|---------------------------------------------------------------|----------------|------------------|----------------|
| TOTAL | | 15,000,000 | 12,887,771 |
|---------------------------------------------------------------|----------------|------------------|----------------|
DEBENTURE PURCHASE AGREEMENT
