Exhibit 10.43
THIS AGREEMENT is made as a Deed the 30th day of April 2004:-
BETWEEN
(1) CANARGO ENERGY CORPORATION, a company registered in Delaware,USA and
having a place of business at XX Xxx 000, Xx. Xxxxx Xxxx, Xxxxxxxx XX0 0XX
(the "COMPANY"); and
(2) C A FIDUCIARY SERVICES LIMITED AS TRUSTEES OF THE SP525A SETTLEMENT of XX
Xxx 000, Xx Xxxxx Xxxx, Xxxxxxxx, XX0 0XX (the "LENDER");
WHEREAS:-
(A) The Lender has agreed to advance to the Company the Loan (as hereinafter
defined) for the purpose of funding the Company's short term working
capital requirements including the acquisition of long lead equipment on
the terms and subject to the conditions set out in this Agreement; and
(B) In consideration for the Lender agreeing to advance the Loan to the
Company the Company has agreed to issue to the Lender a Warrant (as
hereinafter defined) to subscribe for certain shares of common stock of
par value of US$0.10 each in the capital of the Company on the terms and
subject to the conditions set out in this Agreement.
NOW THEREFORE IT IS IT IS AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement unless the context otherwise requires
"CORNELL FACILITY" means a Standby Equity Distribution Agreement between
Cornell and the Company;
"DEFAULT INTEREST RATE" means fifteen per cent (15%) per annum;
"EXERCISE NOTICE" means a notice in writing in the form set out in Part 2
of the Schedule served by the Lender on the Company pursuant to Clause
6.2;
"EXTRAORDINARY RESOLUTION" for the purposes of Clause 10 means a
resolution proposed at a meeting of the holders of outstanding warrants to
subscribe for shares of common stock of US$0.10 each in the capital of the
Company duly convened and held and passed by a majority consisting of
warrant holders entitled to subscribe for not less than 50 per cent of the
shares of common stock of US$0.10 each in the capital of the Company which
are subject to outstanding warrants;
"EXERCISE PERIOD" means the period of 5 years commencing on the date of
this Agreement;
"EXERCISE PRICE" means a price of US$1.05 per Warrant Share;
"INITIAL DEFAULT PERIOD" means a period of one month commencing on the
date of expiry of the Term;
"INTEREST RATE" means seven and a half per cent (7.5%) per annum;
"LOAN" means the sum of(pound)170,000 (One hundred and Seventy Thousand
Pounds Sterling);
"PENALTY INTEREST RATE" means twenty per cent (20%) per annum;
"SCHEDULE" means the schedule in two parts attached to and forming part of
this Agreement;
"TERM" means a period of six months commencing on the date of drawdown by
the Company of the Loan or any part thereof;
"WARRANT" means a warrant to subscribe for the Warrant Shares pursuant to
Clause 5.1;
"WARRANT CERTIFICATE" means a certificate in the form set out in Part 1 of
the Schedule; and
"WARRANT SHARES" means 300,000 shares of common stock of par value of
US$0.10 in the capital of the Company.
1.2 In this Agreement, unless otherwise specified or the context
otherwise requires:-
(a) words importing the singular only and shall include the plural and
vice versa;
(b) words importing any gender shall include all other genders;
(c) reference to a Clause or Recital is to a clause or recital of this
Agreement;
(d) reference to the Schedule is to the schedule to this Agreement;
(e) words importing the whole shall be treated as including a reference
to any part thereof;
(f) reference to a "person" includes any individual, firm, company or
other body corporate wherever incorporated or established,
corporation, government, state or agency of state, trust or
foundation, or any association, partnership or unincorporated body
(whether or not having separate legal personality) or two or more of
the foregoing; and
(g) reference to this Agreement or to any other document shall be
construed as references to this Agreement or to that other document
as modified, amended, varied, supplemented, assigned, novated or
replaced from time to time.
1.3 Headings used in this Agreement shall not affect its construction or
interpretation.
1.4 The Schedule and Recitals form part of this Agreement and have the
same full force and effect as if expressly set out in their entirety
in the operative part of this Agreement.
2 THE LOAN
2.1 The Lender hereby agrees to advance the Loan to the Company on the
terms and subject to the conditions set out in this Agreement.
2.2 The Loan shall be made available to the Company and the Company
shall be entitled to draw down all or any part of the Loan
immediately following the execution of this Agreement.
The Loan shall be made available and drawn down in one tranche, and upon
drawdown shall be forwarded to the Company's bank account the details of
which are as follows:-
CanArgo Energy Corporation Sterling Account
Account Number: 00000000
Sort Code: 40-49-24
HSBC Bank International Limited
XX Xxx 000
Xx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
Channel Islands
SWIFT: MIDLJESH
3 INTEREST
3.1 Subject to Clause 3.2, the Loan shall bear interest at the Interest
Rate. Such interest shall accrue from day to day from the date of
drawdown of the Loan until the date of payment (both dates
inclusive) and shall be calculated on the basis of actual days
elapsed and a 365 day year.
3.2 In the event that the Company shall fail to repay the Loan and all
interest accrued thereon in full on or before the expiry of the Term
then:-
(a) the outstanding balance of the Loan and all accrued interest shall
bear interest at the Default Interest Rate which shall accrue from
day to day from the date of the expiry of the Term until the date of
payment (both dates inclusive) during the Initial Default Period;
and
(b) any amount of the Loan and all accrued interest which remains
outstanding following the expiry of the Initial Default Period shall
bear interest at the Penalty Interest Rate which shall accrue from
day to day from the date of the expiry of the Initial Default Period
until the date of payment (both dates inclusive) and shall be
calculated on the basis of actual days elapsed and a 365 day year.
4 REPAYMENT
4.1 The Loan together with all interest accrued thereon shall be repaid
in full by the Company to the Lender on or before the date of expiry
of the Term. In the event that the Company raises in excess of
US$10,000,000 by way of an equity offering(s) the Loan shall be
repayable within 7 days of receipt by the Company of the proceeds of
that offering.
4.2 In the event that the Company shall be unable to repay the Loan and
all interest accrued thereon in accordance with Clause 4.1, the
Company hereby unconditionally and irrevocably undertakes to the
Lender that it shall use all reasonable endeavours to draw down
sufficient funds from the Cornell Facility in order to repay such
sums as soon as reasonably practicable following the expiry of the
Term.
5 GRANT OF WARRANT
5.1 Subject only to the Lender advancing the Loan to the Company, the
Company hereby grants the Warrant to the Lender to subscribe for any
or all of the Warrant Shares at the Exercise Price on the terms set
out in this Agreement.
5.2 Immediately following the execution of this Agreement the Company
shall deliver to the Lender a Warrant Certificate in respect of the
Warrant Shares.
5.3 In the event of any capitalisation issue, rights issue, open offer,
consolidation, sub-division or reduction or other variation of share
capital by the Company the number of Warrant Shares and/or the
Exercise Price in relation to each Warrant Share may, if the Board
of the Company considers it appropriate or at the request of the
Lender, be adjusted in such manner as the Auditors confirm in
writing to be fair and reasonable.
5.4 The Company shall promptly after any adjustment has been made
pursuant to this clause give notice thereof to each Warrant Holder.
6 EXERCISE OF WARRANT
6.1 The Warrant may be exercised by the Lender at any time during the
Exercise Period.
6.2 The Warrant shall be exercised by the Lender giving notice in
writing to the Company intimating that he wishes to exercise the
Warrant and specifying the number of Warrant Shares which he then
wishes to subscribe for.
6.3 Once lodged, an Exercise Notice shall be irrevocable save with the
consent of the directors of the Company. An Exercise Notice that is
completed and lodged otherwise than in accordance with this Clause 6
shall be of no effect.
6.4 On receipt of an Exercise Notice the Company shall, subject to
receipt by the Company of:-
(a) an amount equal to the aggregate of the Exercise Price due in
respect of the number of Warrant Shares specified in the Exercise
Notice; and
(b) the Warrant Certificate;
and subject to compliance by the Company with the terms of Clause 6.5,
issue and allot to the Lender the number of Warrant Shares specified in
the Exercise Notice as soon as reasonably practicable thereafter.
6.5 The Company hereby unconditionally and irrevocably undertakes and
confirms to the Lender that it shall, prior to the issue and
allotment of any Warrant Shares pursuant to Clause 6.4 ensure that
it has complied in all respects with the rules and regulations of
the Securities and Exchange Commission and American Stock Exchange
in order to ensure that the Warrant Shares allotted to the Lender
are freely tradable and not restricted as at the date of issue. To
the extent that it is not possible and the Warrant Shares so issued
are restricted, the Company shall use its best efforts to clear the
said restricted stock as soon as possible thereafter.
6.6 In the event that the Lender serves an Exercise Notice in respect of
some only of the Warrant Shares (the "EXERCISE SHARES") the Company
shall at the time of issue and allotment of the Exercise Shares
issue to the Lender a new Warrant Certificate in respect of the
balance of Warrant Shares remaining available to the Lender under
the Warrant.
7 REGISTER
7.1 The Company shall keep a register of warrants (the "REGISTER") at
its registered office for the time being in which shall be entered:-
(a) the name and address of the Lender and any other holders from time
to time of any warrants;
(b) the date at which the Lender and any other warrant holder is entered
in the Register respect of the warrant standing in his name; and
(c) the serial number of each warrant certificate issued by the Company
and the date of issue thereof.
7.2 The Lender shall be entitled at all reasonable times during normal
business hours to inspect and take copies of the Register.
8 LAPSE OF WARRANT
8.1 Time shall be of the essence for the purposes of the exercise of the
Warrant.
8.2 To the extent not already exercised before the expiry of the
Exercise Period, the Warrant shall automatically lapse on the expiry
of the Exercise Period.
9 RANKING OF WARRANT SHARES
9.1 Warrant Shares issued and allotted to the Lender pursuant to Clause
6.4 will rank for all dividends or other distributions declared on
the shares of common stock of US$0.10 each in the capital of the
Company after the date of allotment of such shares (but not before
such date) and otherwise pari passu in all respects with the shares
of common stock of US$0.10 each in the capital of the Company in
issue on the date of such allotment.
10 VARIATION OF RIGHTS
10.1 All or any of the rights for the time being attached to the Warrant
may from time to time (whether or not the Company is being wound up)
be altered or abrogated with the consent in writing of the Company
and with either the consent in writing of all warrant holders
entitled to subscribe for not less than 50 per cent of the shares of
common stock of US$0.10 each in the capital of the Company which are
subject to outstanding warrants or with the sanction of an
Extraordinary Resolution of the warrantholders.
11 LOST OR DAMAGED WARRANT CERTIFICATES
11.1 If any Warrant Certificate is worn out or defaced then upon
production of such certificate to the directors of the Company they
may cancel the same and may issue a new certificate in lieu thereof.
11.2 If any Warrant Certificate is lost or destroyed then upon proof
thereof to the reasonable satisfaction of the directors of the
Company (or in default of proof, on such indemnity as the directors
of the Company may deem adequate, being given) a new certificate in
lieu thereof may be given to the Lender free of charge (save as
regards any payment pursuant to any such indemnity).
11.3 An entry as to the issue of any new Warrant Certificate and
indemnity (if any) shall be made in the Register.
12 COMPANY UNDERTAKINGS
12.1 The Company undertakes to the Lender that it shall throughout the
Exercise Period keep available for issue sufficient authorised but
unissued shares of common stock of US$0.10 each in the capital of
the Company necessary to satisfy in full all subscription rights
exercisable by the Lender pursuant to the Warrant.
12.2 If an offer or invitation is made to all holders of shares of common
stock of US$0.10 each in the capital of the Company to acquire the
whole or any part of such shares and the Company becomes aware that
as a result of such offer or invitation the right to cast a majority
of votes which may ordinarily be cast at a general meeting of the
Company has become or may become vested in the offeror and/or
persons acting in concert with the offeror, the Company shall, so
far as it is able, procure that a like offer or invitation is made
or extended at the same time to the Lender as if the Warrant had
been exercised in full and as if the Warrant Shares issued pursuant
to such exercise had been issued immediately prior to the record
date for such an offer or invitation.
12.3 For so long as the Warrant shall remain exercisable by the Lender
the Company shall send to the Lender a copy of every document sent
to the holders of shares of common stock of US$0.10 each in the
capital of the Company at the same time as it is sent to such
holders.
13 NOTICE
13.1 Any notice to be given under, or in connection with the matters
contemplated by, this Agreement shall be in writing and signed by or
on behalf of the party giving it and shall be served by delivering
it personally or sending it by pre-paid recorded delivery or
registered post or by facsimile to the address and for the attention
of the relevant party set out below (or as otherwise notified by
that party hereunder). Any such notice shall be deemed to have been
received:-
(a) if delivered personally, at the time of delivery; and
(b) in the case of pre-paid recorded delivery or registered post, 48
hours from the date of posting;
(c) in the case of fax, at the time of transmission;
Provided that if deemed receipt occurs before 9am on a business day the
notice shall be deemed to have been received at 9am on that day and if
deemed receipt occurs after 5pm on a business day, or on a day which is
not a business day, the notice shall be deemed to have been received at
9am on the next business day. For the purpose of this Clause 13 "BUSINESS
DAY" means a day, other than a Saturday or a Sunday, on which clearing
banks are open for commercial business in London.
13.2 The addresses and facsimile numbers of the parties for the purposes
of this Clause 13 are:-
Company: CanArgo Energy Corporation
Address: X.X. Xxx 000, Xx Xxxxx Xxxx, Xxxxxxxx XX0 0XX
For the attention of: Dr Xxxxx Xxxxxx
Fax number: 01481 729982
Lender: CA Fiduciary Services Limited as Trustees of The
SP525A Settlement
Address: XX Xxx 000, Xx. Xxxxx Xxxx, Xxxxxxxx, XX0 0XX
Fax number: 01481 729726
or such other address or facsimile number as may be notified in writing
from time to time by the relevant party to the other party.
13.3 For the avoidance of doubt notice given under this Agreement shall
not be validly served if sent by e-mail.
14 FURTHER ASSURANCE
The parties shall at their own cost do or procure the doing of all such
acts and things and/or execute or procure the execution of all such
documents as are reasonably required to give effect to the provisions of
this Agreement.
15 ASSIGNMENT
Neither party shall be entitled to assign in whole or in part any rights
and/or obligations arising under this Agreement to a third party without
the prior written consent of the other party.
16 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties with
respect to the matters dealt with herein and supersedes any previous
agreement between the parties in relation to such matters.
17 VARIATION
No variation of this Agreement shall be valid or effective unless made by
an instrument in writing signed by both of the parties.
18 WAIVER
No waiver by either party of any of the requirements hereof or of any of
its rights hereunder shall be effective unless given in writing and signed
by or on behalf of that party and no forbearance, delay or indulgence by
either party in enforcing the provisions of this Agreement shall prejudice
or restrict the rights of that party nor shall any waiver by that party of
any of the requirements hereof or any of its rights hereunder release the
other from full performance of its remaining obligations stated herein.
19 SEVERABILITY
Each provision of this Agreement shall be construed separately and (save
as otherwise expressly provided herein) none of the provisions hereof
shall limit or govern the extent, application or construction of any other
of them and notwithstanding that any provision of this Agreement may prove
to be illegal or unenforceable the remaining provisions of this Agreement
shall continue in full force and effect.
20 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by each
of the parties on separate counterparts each of which when executed and
delivered shall be deemed to be an original, but all the counterparts
together shall constitute one and the same agreement.
21 LAW AND JURISDICTION
21.1 This Agreement shall be governed by and construed in accordance with
the law of England.
21.2 Each party hereby submits to the non-exclusive jurisdiction of the
Courts of England as regards any claim, dispute or matter arising
out of or in connection with this Agreement and its implementation
and effect.
IN WITNESS of which the parties have executed and delivered this document as a
deed on the date first before written.
SCHEDULE
PART 1
WARRANT CERTIFICATE
CANARGO ENERGY CORPORATION (THE "COMPANY")
X.X. Xxx 000
Commerce House
Les Xxxxxxx
Xx Xxxxx Xxxx
XXXXXXXX
XX0 0XX
WARRANT REPRESENTING SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OF PAR VALUE
OF US$0.10 IN THE CAPITAL OF THE COMPANY
This is to certify that C A Fiduciary Services Limited as Trustees of The SP525A
Settlement of XX Xxx 000, Xx Xxxxx Xxxx, Xxxxxxxx, XX0 0XX (xxx "HOLDER") is the
registered holder of a Warrant which entitles the holder to subscribe for
300,000 shares of common stock of par value of US$0.10 in the capital of the
Company fully paid (the "WARRANT SHARES") at a price of US$1.05 per Warrant
Share subject to the terms of the agreement between the Company and the Holder,
dated [ ]. Subject as aforesaid the Holder shall be entitled to subscribe for
the Warrant Shares upon exercise of the Warrant and may exercise the Warrant in
whole or in part and from time to time.
DATED
EXECUTED AND DELIVERED AS A DEED
by CANARGO ENERGY CORPORATION
acting by
/s/: D Robson............................. Director
Dr Xxxxx Xxxxxx........................... Full Name
/s/: X X Xxxxxxx.......................... Secretary
Xxxxxxxxx Xxxx Xxxxxxx.................... Full Name
NOTE: NO TRANSFER OF ANY OR ALL OF THE SUBSCRIPTION RIGHTS REPRESENTED BY THIS
WARRANT WILL BE REGISTERED WITHOUT THE PRODUCTION OF THIS WARRANT OR AN
INDEMNITY SATISFACTORY TO THE COMPANY.
PART 2
EXERCISE NOTICE
TO: THE DIRECTORS
CANARGO ENERGY CORPORATION (THE "COMPANY")
FROM: C A FIDUCIARY SERVICES LIMITED, AS TRUSTEES OF THE SP525A SETTLEMENT
(THE "WARRANTHOLDER")
DATE: [ ] 200[ ]
1 I/WE, THE REGISTERED HOLDER(S) OF THIS WARRANT HEREBY:-
1.1 GIVE NOTICE OF MY/OUR WISH TO EXERCISE MY/OUR SUBSCRIPTION RIGHTS IN
RESPECT [ ] SHARES OF COMMON STOCK OF PAR VALUE OF US$0.10 IN THE CAPITAL
OF THE COMPANY (THE "WARRANT SHARES") IN ACCORDANCE WITH THE PARTICULARS
BELOW;
1.2 CONFIRM THAT US$[ ] HAS BEEN TRANSFERRED TO THE BANK ACCOUNT NOTIFIED TO
ME/US BY THE COMPANY BEING PAYMENT IN FULL AT A PRICE OF [ ] PER SHARE FOR
THE TOTAL NUMBER OF WARRANT SHARES FOR WHICH I/WE WISH TO SUBSCRIBE;
1.3 REQUEST THAT ALL OF SUCH WARRANT SHARES BE REGISTERED IN MY/OUR NAME(S)
AND AUTHORISE THE ENTRY OF MY/OUR NAME(S) IN THE REGISTER OF MEMBERS IN
RESPECT THEREOF;
1.4 AUTHORISE THE DESPATCH OF THE CERTIFICATE IN RESPECT OF THE WARRANT SHARES
TO BE ALLOTTED TO ME/US AND A WARRANT IN MY/OUR NAME(S) FOR ANY BALANCE OF
MY/OUR SUBSCRIPTION RIGHTS REMAINING EXERCISABLE BY POST AT MY/OUR RISK TO
THE ADDRESS SHOWN ABOVE.
............................ ........................
............................ ........................
SIGNATURE(S) OF REGISTERED WARRANTHOLDER(S)
DATE(S)
EXECUTED AND DELIVERED AS A DEED
by CANARGO ENERGY CORPORATION acting by
/s/: D Robson............................. Director
Dr Xxxxx Xxxxxx........................... Full Name
/s/: X X Xxxxxxx.......................... Secretary
Xxxxxxxxx Xxxx Xxxxxxx.................... Full Name
EXECUTED AND DELIVERED AS A DEED
by C A FIDUCIARY SERVICES LIMITED, AS TRUSTEES OF
THE SP525A SETTLEMENT
/s/: P Xxxxxxxx...........................
before this witness
/s/: X X Xxxxxxx.......................... Witness
Xxxxx X Xxxxxxx........................... Full Name
Compass Point, Ville Baudu,............... Address
Vale, Guernsey............................
LOAN AND WARRANT AGREEMENT
between
CANARGO ENERGY CORPORATION
and
C A FIDUCIARY SERVICES LIMITED, AS TRUSTEES OF
THE SP525A SETTLEMENT
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[MCGRIGORS GLASGOW LOGO]
Xxxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
XXXXXXX
X0 0XX
Telephone: 0000 000 0000
Facsimile: 0141 204 1351 / 221 1390
E-Mail: xxxxxxxxx@xxxxxxxxx.xxx
Web Site: xxxx://xxx.xxxxxxxxx.xxx
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