TIDMMOIL
RNS Number : 7391Q
Madagascar Oil Limited
02 March 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR
JAPAN
2 March 2016
MADAGASCAR OIL LIMITED
("Madagascar Oil" or the "Company")
Conditional Framework Agreement, Financing Commitment
and
Potential Delisting
Madagascar Oil announces that, following discussions with
certain of its Lenders, namely Outrider Master Fund, LP
("Outrider"), BMK Resources Limited ("BMK") and The John Paul
Dejoria Family Trust ("JPD") (together the "Relevant Lenders"),
each also being a significant Shareholder of the Company, it has
entered into a framework agreement (the "Framework Agreement")
which, amongst other things, includes a structure for the Relevant
Lenders to provide further financing to the Company (the
"Financing"). Details of the Financing and Framework Agreement are
set out below and the Framework Agreement is appended to this
announcement, in full, as Appendix I.
Under the Framework Agreement, the Relevant Lenders have
committed to invest US$2.0 million, via the Tranche 1 Placing of
equity at a price of 1.00p per Common Share, should the Company
choose to call on this commitment. As set out in greater detail
below, this Financing commitment from the Relevant Lenders expires
on 6 March 2016.
The Relevant Lenders may also participate in a Tranche 2
Funding, either by way of a further equity placing of between
US$2.0 million and US$4.0 million, at 0.75p per Common Share, or a
drawdown under the Facilities Agreement, depending on whether
certain conditions have been satisfied under the Framework
Agreement, including, inter alia, the Delisting of the Company. The
Financing and the other key terms of the Framework Agreement are
conditional on the Independent Directors of the Company electing to
proceed with the Tranche 1 Placing, by 6 March 2016, as set out
below.
As announced on 18 February 2016, in order to secure the
Financing, which the Board believes is required for the Company to
continue as a going concern, the Relevant Lenders have insisted
that, should the Independent Directors of the Company call the
Tranche 1 Placing, then the Company will also have to commit to
convene a Special General Meeting to table resolutions to seek
Shareholder approval to cancel the admission of its Common Shares
to trading on AIM (the "Delisting").
The Board has agreed to this, and certain other conditions, as
summarised below, all of which including, inter alia, the
amendments to the Facilities Agreement and the Delisting
arrangements, are subject to the Independent Directors calling on
the Tranche 1 Placing.
For the avoidance of doubt all capitalised terms used herein
shall have the same meaning, unless stated or the context requires
otherwise, as given to them in the Framework Agreement, appended as
Appendix I.
Summary of the Framework Agreement
As noted above, on 1 March 2016, the Company and the Relevant
Lenders entered into the Framework Agreement in relation to,
amongst other things, the subscription for the Tranche 1 Placing
Shares, the Tranche 2 Funding, the amendment of the Facilities
Agreement and the convening of the Delisting General Meeting, all
of which are conditional on the Company calling on the funds
committed under the Tranche 1 Placing.
Independent Directors' Election
The operative provisions of the Framework Agreement will only
come into effect if the Independent Directors, in their sole
discretion, resolve at a committee meeting of the Independent
Directors, to make an election to proceed with the Tranche 1
Placing (the "Independent Directors' Election") and shall cease to
have effect if the Independent Directors' Election does not occur
by 3.00 p.m. (London time) on the fifth day immediately following
the date of execution of the Framework Agreement being 6 March 2016
(or such later time and date as the Company and the Majority
Lenders may agree) (the "Election Long Stop Date").
In the event the Company decides to pursue alternative financing
and, as a result of this, the Independent Directors' Election is
not made by the Election Long Stop Date, a break fee of US$250,000
(in aggregate), shall be payable by the Company to the Relevant
Lenders, in addition to the costs of the Relevant Lenders incurred
in preparing the Framework Agreement, which are capped at
US$180,000.
Related Party Transaction
Given that the Framework Agreement has been entered into with
the Relevant Lenders, of which two are substantial Shareholders in
the Company, entering into the Framework Agreement constitutes a
related party transaction under AIM Rule 13 of the AIM Rules for
Companies.
Accordingly, the Independent Directors, as defined by the AIM
Rules for the purposes of AIM Rule 13 (being Robert Estill, Michael
Duginski and Iain Patrick), having consulted with the Company's
nominated adviser, Strand Hanson Limited, consider that the terms
of the Framework Agreement are fair and reasonable insofar as the
Company's Shareholders are concerned.
Financing
Subject to both the Independent Directors exercising the
Independent Directors' Election and the terms and conditions of the
Framework Agreement, US$2.0 million is to be made available by the
Relevant Lenders as follows:
-- Tranche 1 Placing: To be structured as a cash box placing to
raise US$2.0 million from the Relevant Lenders on the terms set out
in the Framework Agreement, by the issue of 143,636,885 new Common
Shares at 1.3924 cents per Tranche 1 Placing Share (being the
equivalent of 1.00p per Tranche 1 Placing Share).
-- Participation in the Tranche 1 Placing will also be offered
to the Other Major Shareholders in proportion to their Pro-Rata
Share, as defined in the Framework Agreement, of the total Tranche
1 Placing Shares, at that time. Accordingly, depending on the
response of the Other Major Shareholders, there could be an
increase in the size of the Tranche 1 Placing should the Other
Major Shareholders elect to participate.
The Framework Agreement also provides for a further tranche of
funding, being the Tranche 2 Funding, as set out below:
-- Tranche 2 Funding: The Tranche 2 Funding can take the form of
either the Tranche 2 Placing or the Tranche 2 Loan, pursuant to the
terms of the Framework Agreement.
o In the event that the Tranche 2 Loan Trigger is satisfied on
or before the Tranche 2 Trigger Date, each of the Relevant Lenders
agrees to provide the Tranche 2 Funding by way of the Tranche 2
Loan.
o Where the Tranche 2 Loan Trigger is not satisfied by the
Tranche 2 Loan Trigger Date, each of the Relevant Lenders agrees to
provide the Tranche 2 Funding by way of either the Tranche 2
Placing or the Tranche 2 Loan (and may support both processes in
parallel) as may be directed by the Majority Lenders.
o The Tranche 2 Loan is envisioned to be at least US$2.0 million
and can be increased by the mutual agreement of the Majority
Lenders and the Company.
o If provided by way of the Tranche 2 Placing, the funding will
be structured as a cash box placing to raise between US$2.0 million
and US$4.0 million by the issue of new Common Shares at 1.0443
cents per Tranche 2 Placing Share (being the equivalent of 0.75p
per Tranche 2 Placing Share).
o Shareholders should note that all Loans to be provided under
the Facilities Agreement (including any Tranche 2 Loan) are now
subject to the agreement of the Majority Lenders.
Participation in the Tranche 2 Placing will be offered to the
Other Major Shareholders in proportion to their Pro-Rata Share of
the total Tranche 2 Placing Shares, at that time.
Amendments to the Facilities Agreement
In order to facilitate the Financing, the following amendments
and waiver have been agreed with the Relevant Lenders (in their
capacity as Majority Lenders and Super Majority Lenders,
respectively representing holders of over 66% and over 75% of the
Loan amounts outstanding) with respect to the Facilities
Agreement:
o The interim interest payment date of 31 March 2016 has been
waived and interest shall continue to accrue until maturity or any
earlier repayment.
o Subject to and with effect from Tranche 1 Admission, the fixed
interest rate under the Facilities Agreement will increase, from
10% per annum, to 20% per annum.
o The arrangement fee for any future drawdowns (including the
Tranche 2 Loan, if applicable) under the Facilities Agreement has
been increased, from 5%, to 20%.
o An event of default will arise if, on or within 20 days after
30 April 2016, the Majority Lenders give notice to the Company
that, in their opinion, insufficient progress has been made by the
Company towards achieving its objectives.
o The Majority Lenders have additional powers to approve any
further loans made under the Facilities Agreement, including the
Tranche 2 Loan.
o The Relevant Lenders, have agreed to waive the requirement
that the proceeds of the Tranche 1 Placing and Tranche 2 Placing
(if applicable) are to be applied to the repayment of the
Loans.
o In return for this waiver, the Company has agreed to pay a
waiver fee of 20% of the amount raised in the Tranche 1 Placing and
Tranche 2 Placing (if applicable) to the Lenders, such waiver fee
to be added to the Lenders' outstanding Loan balance, rather than
paid in cash.
o The Relevant Lenders have agreed not to offset their Loans
against their subscriptions in the Tranche 1 Placing and Tranche 2
Placing (if applicable).
Delisting Arrangements
o Within 5 Business Days of any Independent Directors' Election
to initiate the Tranche 1 Placing, the Company shall approve for
dispatch the Delisting Circular to convene a Special General
Meeting to table resolutions to seek Shareholder approval for the
Delisting (the "Delisting General Meeting"). The Delisting
Resolutions will be special resolutions requiring the support of 75
per cent. of votes cast to be passed.
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:01 ET (07:01 GMT)
o Following the Delisting General Meeting, and in the event that
the Delisting Resolutions were not passed, the Majority Lenders may
give notice to the Board for it to call another General Meeting
(the "Second Delisting General Meeting") to propose resolutions to
delist and the Board has agreed to call that meeting within 10
Business Days of receiving such notice.
o The Delisting has the support of the Relevant Lenders, who
together with their Affiliates represent approximately 67.0 per
cent. of the Company's issued share capital and who have
irrevocably committed to the Company that they shall, and shall
procure that each of its Affiliates (to the extent that any such
Affiliate holds Voting Rights) shall, exercise all of its Voting
Rights so as to vote in favour of each and all the Delisting
Resolutions at the Delisting General Meeting and the Second
Delisting Resolutions at the Second Delisting General Meeting (if
applicable).
Appointment of the New Benchmark Directors
Pursuant to the terms of the Framework Agreement, the Board has
resolved, subject to certain conditions (being, inter alia, the
occurrence of Independent Directors' Election, the receipt of the
Appointment Letters, and nominated adviser approval of their
suitability if applicable) to accept the appointment of two
directors nominated for appointment by the Benchmark Parties, in
accordance with the terms of the Benchmark/SEP Relationship
Agreement. Subject to these conditions being satisfied, the
appointments will be effective on either Delisting or within 5
Business Days of the Delisting General Meeting if the Delisting
Resolutions are not passed.
Continuing Obligations and Related Bye-Laws Amendments
The Independent Directors have negotiated several undertakings
from the Relevant Lenders in order to give certain protections to
Minority Shareholders following any Delisting, should it occur as a
result of the Delisting General Meeting or the Second Delisting
General Meeting, and to give the Minority Shareholders, as far as
practicable, the opportunity to benefit from any accretion in value
that may potentially be generated as the Partner Process runs its
course.
These undertakings will be drafted as amendments to the Bye-Laws
and any Delisting will be conditional on the passing of a
resolution (the "Bye-Laws Resolution") to approve these amendments
to the Bye-Laws (and vice versa) at the relevant General Meeting.
The Relevant Lenders have, in the Framework Agreement, irrevocably
committed to vote in favour of the Bye-Laws Resolution at the
relevant General Meeting.
The key undertakings which will form the basis of the Bye-Laws
Resolution, given by the Relevant Lenders and the Company (as
indicated below) under Clause 6 of the Framework Agreement are as
follows:
o the Relevant Lenders will not convert the outstanding balance
under the Facilities Agreement into equity prior to 15 September
2016;
o the Relevant Lenders will not invoke any compulsory purchase
rights pursuant to Section 103 of the Bermuda Companies Act to
acquire shares owned by Minority Shareholders prior to 31 December
2016;
o the Company will continue to maintain a website to provide
certain information to shareholders for a period of at least 24
months following the publication of the Circular; and
o the Company will endeavour, with effect from a Delisting, to
make a trading service available to facilitate the trading of
shares by minority shareholders, and the Relevant Lenders have
given undertakings to assist with this process.
The Company and Relevant Lenders have also agreed that certain
Drag Along and Tag Along rights will be incorporated into the
Bye-Laws for the benefit of the minority shareholders in the event
that the Company is subject to a change of control.
Shareholders should note that the Drag Along and Tag Along
provisions would only become effective should the current
protections under Bye-Law 50 (Takeover Offers) cease to have
effect.
Minority Shareholders
As noted above, several undertakings have been given by the
Relevant Lenders and the Company to the Minority Shareholders.
Whilst the Minority Shareholders are not a party to the Framework
Agreement, the Parties have agreed that certain undertakings (as
referenced in clause 11.3 of the Framework Agreement) shall be
enforceable in accordance with the Contracts (Rights of Third
Parties) Act 1999 and may not be amended, varied or waived in any
way by the Parties without the Approval of the Minority
Shareholders.
The full text of the Framework Agreement is set out as Appendix
I to this announcement.
Contact Information:
Robert Estill - Chief Executive
Officer
Stewart Ahmed - Chief Operating
Officer
Gordon Stein - Chief Financial +44 (0) 20 3356
Officer 2731
Strand Hanson Limited - Nominated
& Financial Adviser
Stuart Faulkner
Angela Hallett +44 (0) 20 7409
James Dance 3494
Jefferies International Limited
- Strategic Advisor +44 (0) 20 7029
Richard Kent 8102
VSA Capital Limited - Joint broker
Andrew Monk
Andrew Raca +44 (0) 20 3005
Justin McKeegan 5000
Mirabaud Securities LLP - Joint
broker +44 (0) 20 7878
Rory Scott 3360
Camarco - PR
Billy Clegg +44 (0) 20 3757
Georgia Mann 4980
appendix I
FRAMEWORK AGREEMENT
Dated 2016
MADAGASCAR OIL Limited
and
tHE PERSONS
set out in Schedule 1
FRAMEWORK AGREEMENT
----------------------
relating to Madagascar Oil Limited
Index
Clause Page
1 Definitions and Interpretation
2 Condition
3 Funding
4 Implementation
5 Governance
6 Continuing Obligations
7 Remedies
8 Warranties
9 Governing Law and Jurisdiction
10 Notices
11 Miscellaneous
Schedule 1 The Relevant Lenders
Schedule 2 Delisting Resolutions
Execution Page
THIS FRAMEWORK AGREEMENT is made on 2016
Between
(1) MADAGASCAR OIL LIMITED, incorporated in Bermuda with
registered number 37901, whose registered office is at Canon's
Court, 22 Victoria Street, Hamilton, HM12 Bermuda (the "Company");
and
(2) THE PERSONS whose names and addresses are set out in Schedule 1.
WHEREAS
(A) The Company is a company limited by shares incorporated in
Bermuda and whose Common Shares are admitted to trading on AIM.
(B) Subject to the Independent Directors' Election having
occurred by the Election Long Stop Date, the Relevant Lenders have
agreed to amend the Facilities Agreement, to subscribe for Tranche
1 Placing Shares and to provide the Tranche 2 Funding on the terms
of this Agreement.
IT IS AGREED as follows:
1 Definitions and Interpretation
1.1 Definitions. In this Agreement the following expressions
have the following meanings unless inconsistent with the
context:
"Affiliate" means when used with reference to a Person (the
"First Person"), shall mean either:
(a) any other Person that directly or indirectly:
(i) is Controlled by that First Person;
(ii) Controls that First Person; or
(iii) is under common Control with that First Person,
(b) if the First Person is an individual, the lineal
descendants, step-children or adopted children of the First Person
and any person with whom such First Person lives as partner in an
enduring family relationship and any lineal descendants,
step-children or adopted children of such person; or
(c) any Person acting in the capacity as trustee of a trust, the
beneficiaries of which include the First Person or any person who
by virtue of paragraphs (a) or (b) above is an Affiliate of the
First Person;
"Agreed Form" means in relation to a document, in a form agreed
by or on behalf of each of the Company and the Majority
Lenders;
"AIM" means the market of that name operated by the London Stock
Exchange;
"AIM Rules" means the AIM Rules for Companies, published by the
London Stock Exchange;
"Appointment Letters" means the non-executive director letters
of appointment to be entered into between each of the New Benchmark
Directors and the Company;
"Approval of the Minority Shareholders" means the approval:
(a) in writing of Minority Shareholders holding between them
more than 50% of the aggregate voting rights attached to the Common
Shares held by the Minority Shareholders; or
(b) by way of a majority of the votes cast by Minority
Shareholders in a general meeting (conducted on a poll and where
each Minority Shareholder shall have one vote for each Common Share
held by him),
provided that in any circumstances where a Lender or its
Affiliates or its Connected Persons becomes a Minority Shareholder
following the date of this Agreement, any Voting Rights of such
Lender and its Affiliates and its Connected Persons shall be
discounted from the denominator and numerator in determining
whether or not the necessary threshold required for the purposes of
an Approval of the Minority Shareholders has been obtained;
"Benchmark Parties" means Benchmark and BMK;
"Benchmark/SEP Relationship Agreement" means the relationship
agreement dated 18 December 2012 (as amended on 24 January 2013)
entered into between the Company, the Benchmark Parties and
SEP;
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:01 ET (07:01 GMT)
"Benchmark" means Benchmark Advantage Fund, Ltd, a company
incorporated in the Cayman Islands with registered number 217893
and whose registered office is at PO Box 309, Ugland House, Grand
Cayman KY1-1104, the Cayman Islands;
"BMK" means BMK Resources Ltd, a company incorporated in the
Cayman Islands with registered number 273934 and whose registered
office is at PO Box 309, Ugland House, Grand Cayman KY1-1104, the
Cayman Islands;
"Board" means the board of directors of the Company;
"Broker's Agent" means Computershare Investor Services PLC, a
company registered in England & Wales with company number
3498808 and whose registered office is at The Pavilions, Bridgwater
Road, Bristol BS13 8AE;
"Broker's Agent Account" means a US$ dollar account in the name
of Computershare Investor Services Plc with the following
details:
NAME: CIS PLC RE: Corporate Actions - USD Application Account
24
BANK: Royal Bank of Scotland PLC
BIC/SWIFT: RBOSGB2L
IBAN: GB07RBOS16630000732633
"Business Day" means a day (other than a Saturday or Sunday) on
which clearing banks in the City of London are open for the
transaction of normal sterling banking business;
"Bye-Laws" means the bye-laws of the Company;
"Common Shares" means the common shares of US$0.001 each in the
capital of the Company, and where the context requires, the
Depositary Interests:
"Companies Act" means the Bermuda Companies Act 1981;
"Connected Persons" when used with reference to a Person (the
"First Person") shall mean any Person (the "Second Person") who,
pursuant to an agreement or arrangement (whether formal or
informal), co-operates with that First Person in relation to:
(a) the acquisition of Voting Rights in the Company for the
purpose of obtaining or consolidating control of the Company;
or
(b) the taking of an action by the Second Person which the First
Person would be prohibited from taking pursuant to Bye-Law 54 of
the Bye-Laws or the undertakings in Clause 6 of this Agreement;
"Control" (including the terms "Controls", "Controlled" and
"Controlling") means, in respect of any Person, the possession of,
or the entitlement to currently possess, whether directly or
indirectly, the power to manage or direct the management of such
Person, or to appoint the managing and governing bodies of such
Person, or a majority of the members thereof, whether through the
ownership of voting securities, by contract or deed (which may
include a shareholders' agreement, side letter or similar
arrangement) or otherwise (and for the avoidance of doubt, a
limited partnership shall be deemed to be Controlled by its
manager, general partner and/or by such other Person or Persons to
whom such Control may have been granted or whom the limited
partnership may have appointed to carry out those functions
ordinarily associated with the rights and obligations of the
manager or general partner);
"Director" means a director of the Company;
"Delisting" means the proposed cancellation of the admission to
trading on AIM of the Common Shares becoming effective in
accordance with the provisions of this Agreement and the AIM
Rules;
"Depositary" means Computershare Investor Services PLC (in their
capacity as the holder of Common Shares on behalf of other persons
pursuant to the terms of a depositary agreement with the Company)
being a company registered in England & Wales with company
number 3498808 and whose registered office is at The Pavilions,
Bridgwater Road, Bristol BS13 8AE or any person appointed in
replacement thereof;
"Depositary Interests" means a depositary interest issued by the
Depositary representing an entitlement to a Common Share which may
be traded through CREST in a dematerialised form;
"Delisting Circular" means the circular to be sent to the
Shareholders, which includes a notice of the Delisting General
Meeting containing the Delisting Resolutions;
"Delisting General Meeting" means the special general meeting of
the Company to approve the Delisting Resolutions;
"Delisting Resolutions" means the special resolutions proposed
in connection with Delisting in the Agreed Form appended to this
Agreement as Schedule 2;
"DI Register" means the register of Depositary Interests
maintained by the Depositary constituting the record of holders
from time to time of the Depositary Interests;
"Election Press Announcement" means the announcement to be made
by the Company in connection with any Independent Directors'
Election;
"Exchange Rate" means exchange rate of GBP1 = US$1.3924 (being
the exchange rate calculated on the last practicable date prior to
the date of this Agreement);
"Facilities Agreement" means the agreement dated 29 June 2015 as
amended and restated by an amendment and restatement agreement
dated 29 September 2015 and entered into between the Company and
the Lenders (as amended from time to time, including by this
Agreement);
"Group" means the Company and all of its Subsidiaries and every
person in relation to which the Company or any of its Subsidiaries
is a Parent Company and "Group Company" means any one of them;
"JPD" means The John Paul Dejoria Family Trust, whose registered
office is at 2934 Oestrick Lane, Austin, Texas 78733, USA;
"Independent Directors" means Directors who have not been
appointed by any of the Lenders pursuant to a contractual right
under the Relationship Agreements and as at the date of this
Agreement are Iain Patrick, Robert Estill and Michael Duginski;
"Irrevocable Undertaking" means a deed of irrevocable
undertaking in the Agreed Form provided by Shareholders to the
Company to vote in favour of the Delisting Resolutions at the
Delisting General Meeting and the Second Delisting Resolutions at
the Second Delisting General Meeting (if applicable);
"Lenders" means Outrider, SEP, JPD and BMK;
"Loan" has the meaning given to such term in the Facilities
Agreement;
"London Stock Exchange" means London Stock Exchange plc;
"Majority Lenders" has the meaning given to it in the Facilities
Agreement;
"Maximum Commitment Amount" means the aggregate of the total
amounts which may be committed or made available by the Relevant
Lenders and the Other Major Shareholders (if applicable) to the
Company pursuant to the Tranche 1 Placing and Tranche 2 Funding
(including, for the avoidance of doubt, any Tranche 2 Placing
Increase or Tranche 2 Loan Increase, as applicable) in accordance
with the terms of this Agreement;
"Matched Trade Service" means an off market trading facility
proposed to be made available on terms reasonably acceptable to the
Board from the date of Delisting and administered by an
administrator who is located in the United Kingdom and regulated by
the Financial Conduct Authority and who will, where possible, match
trades in the Common Shares between willing buyers and willing
sellers;
"Minority Shareholders" means a Shareholder who, together with
their Affiliates, holds five per cent. (5%) or less of the Common
Shares from time to time;
"Nomad" means Strand Hanson Limited;
"Other Major Shareholders" means SEP and such other Shareholders
as the Board may determine;
"Outrider" means Outrider Master Fund, LP, a company
incorporated in the Cayman Islands with registered number 606863
and whose registered office is at c/o Elian Fiduciary Services
(Cayman) Limited, 89 Nexus Way, Camama Bay, Grand Cayman KY1-9007,
Cayman Islands;
"Outrider Relationship Agreement" means the relationship
agreement dated 24 September 2014 entered into between the Company
and Outrider;
"Parent Company" has the meaning given to it in section 1173(1)
of the UK Companies Act 2006;
"Parties" means the parties to this Agreement, each of which is
a "Party";
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political
subdivision thereof;
"Placing Letters" means the Tranche 1 Placing Letters and the
Tranche 2 Placing Letters;
"Placing Price" means the Tranche 1 Placing Price or the Tranche
2 Placing Price (as the case may be);
"Placing Shares" means the Tranche 1 Placing Shares and/or the
Tranche 2 Placing Shares (as the case may be);
"Pro-Rata Share" means in the case of any Other Major
Shareholder:
A
B
where:
A = the number of Common Shares held by such Other Major
Shareholder (at such time of calculation); and
B = the total number of Common Shares in issue (at such time of
calculation);
"Regulatory Information Service" means an information
dissemination service provider approved by the Financial Conduct
Authority whose name is on the list maintained by the Financial
Conduct Authority;
"Related Party" means a Director, a Substantial Shareholder and
each of their Affiliates;
"Relationship Agreements" means the Benchmark/SEP Relationship
Agreement and the Outrider Relationship Agreement;
"Relevant Lenders" means Outrider, JPD and BMK, each of which is
a "Relevant Lender";
"Required Information" means, in respect of a transaction, the
following information:
(a) particulars of the transaction, including the name of any other relevant parties;
(b) a description of the assets which are the subject of the
transaction, or the business carried on by, or using, the
assets;
(c) the full consideration and how it is being satisfied; and
(d) in the case of a disposal, the application of the sale proceeds;
"RIS Hours" means 7.00 a.m. to 6.30 p.m. on a Business Day,
being the operating hours of the Regulatory Information
Service;
"Second Delisting General Meeting" means the special general
meeting of the Company to be convened in accordance with Clause
3.5(e)(iv) to approve the Second Delisting Resolutions;
"SEP" means SEP African Ventures Limited, a company incorporated
in Gibraltar with registered number 90967 and whose registered
office is at P.O. Box 199, 57/63 Line Wall Road, Gibraltar;
"Shareholder" means a shareholder of the Company;
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:01 ET (07:01 GMT)
"Signature Press Announcement" means the announcement to be made
by the Company in connection with the execution of this
Agreement;
"Substantial Shareholder" means a Shareholder holding Common
Shares representing at least 10% of the aggregate Voting Rights of
the Company;
"Subsidiaries" means each subsidiary and subsidiary undertaking
(as defined in the UK Companies Act 2006) from time to time;
"Tranche 1 Admission" means the admission to trading on AIM of
all of the Tranche 1 Placing Shares becoming effective in
accordance with Rule 6 of the AIM Rules;
"Tranche 1 Placing" the proposed cash box placing of the Tranche
1 Placing Shares at the Tranche 1 Placing Price on the terms set
out in this Agreement and in the Tranche 1 Placing Letter to raise
US$2 million from the Relevant Lenders plus such additional amount
that may be raised from the Other Major Shareholders if they elect
to participate in full for their respective Pro-Rata Share as
contemplated by Clause 3.3(b);
"Tranche 1 Placing Letter" means the placing letter in the
Agreed Form to be signed by each of the Relevant Lenders and, to
the extent that they participate in the Tranche 1 Placing, the
Other Major Shareholders, pursuant to which they will subscribe for
the Tranche 1 Placing Shares;
"Tranche 1 Placing Price" means US$0.013924 (representing 1p at
the Exchange Rate) per Tranche 1 Placing Share;
"Tranche 1 Placing Shares" means the new Common Shares that may
be issued pursuant to the Tranche 1 Placing;
"Tranche 1 Subscription Amount" means, in respect of each
Relevant Lender, the cash amount set out against its name in column
3B of Schedule 1;
"Tranche 2 Admission" means the admission to trading on AIM of
all of the Tranche 2 Placing Shares becoming effective in
accordance with Rule 6 of the AIM Rules;
"Tranche 2 Funding" means the Tranche 2 Placing or the Tranche 2
Loan;
"Tranche 2 Loan" means a loan of US$2 million to be made
pursuant to the terms of the Facilities Agreement;
"Tranche 2 Loan Increase" has the meaning given to it in Clause
3.6(d);
"Tranche 2 Loan Trigger" means:
(i) the termination of the Relationship Agreements and the Deed of Undertaking;
and the first to occur of:
(ii) the passing of the Delisting Resolutions at the Delisting General Meeting; or
(iii) the receipt by the Company of Irrevocable Undertakings
from Shareholders holding Common Shares carrying at least 75% of
the aggregate Voting Rights in the Company to vote in favour of the
Delisting Resolutions;
"Tranche 2 Placing" the proposed cash box placing of the Tranche
2 Placing Shares at the Tranche 2 Placing Price on the terms set
out in this Agreement and in the Tranche 2 Placing Letter to raise
up to approximately US$2 million from the Relevant Lenders (or such
greater amount pursuant to the Tranche 2 Placing Increase as may be
determined in accordance with Clause 3.5(b)) plus such additional
amount that may be raised from the Other Major Shareholders if they
elect to participate in full for their respective Pro-Rata Share in
accordance with Clause 3.5(e);
"Tranche 2 Placing Increase" has the meaning given to it in
Clause 3.5(b);
"Tranche 2 Placing Letter" means the placing letter in
substantially the same form as the Tranche 1 Placing Letter to be
signed by each of the Relevant Lenders and, to the extent that they
participate in the Tranche 2 Placing, the Other Major Shareholders,
pursuant to which they will subscribe for the Tranche 2 Placing
Shares;
"Tranche 2 Placing Price" means US$0.010443 (representing 0.75p
at the Exchange Rate) per Tranche 2 Placing Share;
"Tranche 2 Placing Shares" means the new Common Shares that may
be issued pursuant to the Tranche 2 Placing;
"Tranche 2 Subscription Amount" means, in respect of each
Relevant Lender, the cash amount set out against its name in column
4B of Schedule 1;
"Tranche 2 Subscription Amount Increase" means, where the
Company and the Majority Lenders have agreed to the Tranche 2
Placing Increase, in respect of each Relevant Lender, the cash
amount required at the Tranche 2 Placing Price to subscribe for
such additional number of Tranche 2 Placing Shares as may be
allocated to it pursuant to Clause 3.5(f); and
"Voting Rights" means the rights attaching to Common Shares to
vote at general meetings of the Company whether such rights are
exercised in person or by proxy or proxies (as the case may
be).
1.2 Construction of certain terms. In this Agreement, unless the
context requires otherwise:
(a) references to recitals, clauses and schedules are to
recitals, clauses and schedules of and to this Agreement;
(b) references to any act, statute or statutory provision
include references to any such provision as amended, re-enacted or
replaced from time to time and any former statutory provision
replaced (with or without modification) by the provision referred
to (save to the extent that such amendment, re-enactment or
replacement would extend, create or increase the liability of any
Party hereto);
(c) where the words "includes", "including", "in particular" or
any similar expression are used in this Agreement, they are deemed
to have the words "without limitation" following them;
(d) references to persons include references to individuals,
firms, corporations or unincorporated associations (whether or not
having separate legal personality and irrespective of the
jurisdiction in or under the law of which it was incorporated or
exists);
(e) references to the singular include references to the plural
and vice versa and references to the masculine gender shall include
references to the feminine and neuter gender and vice versa;
and
(f) headings are inserted for convenience only and shall not
affect the interpretation of this Agreement or any part
thereof.
2 Condition
2.1 Clauses 3 to 6 (other than Clause 4.1(a) and Clause 4.1(b))
are conditional upon the Independent Directors, in their sole
discretion, resolving at a committee meeting of the Independent
Directors, to make an election to proceed with the Tranche 1
Placing (the "Independent Directors' Election") and shall cease to
have effect if the Independent Directors' Election does not occur
by 3.00 pm London time on the 5(th) day immediately following the
date of this Agreement (or such later time and date as the Company
and the Majority Lenders may agree)(the "Election Long Stop Date").
In the event that the Company decides to pursue alternative
financing and as a result of this the Independent Directors'
Election is not made by the Election Long Stop Date, a break fee of
US$250,000 (in aggregate) shall be payable by the Company to the
Relevant Lenders as the Majority Lenders direct, such amount to be
paid towards the fees incurred by the Relevant Lenders in
connection with this Agreement.
3 Funding
3.1 Amendments to the Facilities Agreement
(a) Pursuant to clause 31.1 of the Facilities Agreement, the
Company and each of the Relevant Lenders (in their capacity as the
Majority Lenders and Super Majority Lenders (as defined in the
Facilities Agreement)) hereby agree that, on the date on this
Agreement, the Facilities Agreement shall be amended as
follows:
(i) the following defined terms shall be added to clause 1.1
(Definitions) of the Facilities Agreement:
"Delisting" has the meaning given to it in the Framework
Agreement;
"Delisting General Meeting" has the meaning given to it in the
Framework Agreement;
"Delisting Resolutions" has the meaning given to it in the
Framework Agreement;
"Framework Agreement" means the agreement entered into on 2016
between the Borrower and the Relevant Lenders;
"Irrevocable Undertakings" has the meaning given to it in the
Framework Agreement;
"Second Drawdown" means a Loan made during the Second
Availability Period;
"Shareholder" has the meaning given to it in the Framework
Agreement;
"Tranche 1 Admission" has the meaning given to it in the
Framework Agreement;
"Tranche 2 Funding" has the meaning given to it in the Framework
Agreement; and
"Voting Rights" has the meaning given to it in the Framework
Agreement;
(ii) clause 5.2(b) of the Facilities Agreement shall be deleted
in its entirety and a new clause 5.2(b) shall be inserted as
follows:
"on or prior to any Second Drawdown Date, if it is satisfied (in
its sole discretion) with the progress being made by the Borrower
towards achieving its objectives (to include without limitation the
Delisting) confirm to the Borrower that it will make a Loan
available to the Borrower on any Second Drawdown Date in an amount
up to its Available Commitment";
(iii) clause 5.3(b) of the Facilities Agreement shall be deleted
in its entirety and a new clause 5.3(b) of the Facilities Agreement
shall be inserted as follows:
"on any Second Drawdown Date (whether on or after the date of
the Tranche 2 Funding), where it has agreed to make a Loan in the
amount confirmed pursuant to clause 5.2(b), make a Loan of such an
amount provided such Loan is approved by the Majority Lenders
(acting in their sole discretion), such approval to be notified to
the Borrower and in the event that no such approval and notice is
provided in respect of all such Loans in the amounts confirmed by
such Lenders, no Loan will be made by any Lender on such Second
Drawdown Date. Each Lender providing such a Loan hereby irrevocably
waives any additional conditions (including any requirements to
provide confirmations under this Agreement) to the making of the
Tranche 2 Funding by way of such a Second Drawdown and is hereby
irrevocably deemed to have provided any confirmations which may be
required from it under this Agreement for the Tranche 2 Funding in
each case with respect to such waiver and confirmations provided
that no Event of Default under clause 20.7(a)(iii) or Clause
20.7(a)(iv) has occurred and is continuing (other than an Event of
Default arising pursuant to or in connection with any action
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taken by the Lenders)";
(iv) a new clause 5.5 shall be added to the Framework Agreement:
"Restrictions on Second Drawdowns
Clause 5.1 is subject to this clause 5.5. The Borrower shall not
make any Request (and any Purported Request shall be deemed null
and void) nor shall any Second Drawdown be made or permitted in
each case during the Second Availability Period other than as
contemplated by the Framework Agreement until or following the date
which is 5 Business Days after the completion of the Tranche 2
Funding without the prior written approval of the Majority
Lenders";
(v) "subject to and with effect from Tranche 1 Admission, clause
10.1 of the Facilities Agreement shall be deleted in its entirety
and a new clause 10.1 of the Facilities Agreement shall be inserted
as follows: "Interest will accrue on each Loan at a fixed rate of
ten per cent per annum. The interest will accrue at this rate with
effect from the Drawdown Date of the relevant Loan until Tranche 1
Admission. Following Tranche 1 Admission, interest will accrue from
such date on each Loan outstanding at a fixed rate of twenty per
cent per annum";
(vi) the words "on 31 March 2016 and" shall be deleted from
clause 10.2(a) of the Facilities Agreement;
(vii) clause 11.1(c) of the Facilities Agreement should be
deleted in its entirety and a new clause 11.1(c) of the Facilities
Agreement shall be inserted as follows:
"On each Second Drawdown Date, an arrangement fee equal to 20%
of the Loan made by that Lender on that date, which shall be deemed
added to the amount of the Loan outstanding on that date"; and
(viii) clause 20.15 of the Facilities Agreement shall be deleted
in its entirety and a new clause 20.15 of the Facilities Agreement
shall be inserted as follows:
"The Majority Lenders confirm (having considered, among other
things, the items set out in the report provided by the Borrower
pursuant to Clause 17.3 (Strategic Transaction) on, or within 20
days after, 30 April 2016, that, in their opinion, insufficient
progress has been made by the Borrower towards achieving its
objectives."
3.2 Waiver under the Facility Agreement
(a) Each of the Relevant Lenders (in their capacity as the
Majority Lenders and Super Majority Lenders (as defined in the
Facilities Agreement)) and the Company hereby agrees in accordance
with clause 31.1 of the Facilities Agreement:
(i) that the net proceeds of the Placing Shares shall be applied
by the Company in accordance with Clause 3.7 and shall not be
applied to repayment of the Loans; and
(ii) that the Placing Price for the Placing Shares shall be paid
in cash and shall not be set off against the Loans and that
accordingly, pursuant to Clause 3.3 and 3.5 (as applicable), it
shall pay the Placing Price in cash for the Placing Shares
subscribed for by it pursuant to the Placing Letters without set
off against the Loans,
and in respect of the Tranche 1 Placing and the Tranche 2
Placing (if applicable), the requirements of clause 8.3 of the
Facilities Agreement shall be deemed waived accordingly.
(b) In consideration of the waiver provided on behalf of the
Lenders pursuant to Clause 3.2(a)(i), the Company will on:
(i) Tranche 1 Admission, pay a waiver fee to the Lenders which
is equal to 20 per cent. of the amount paid by the subscribers in
the Tranche 1 Placing for the Tranche 1 Placing Shares; and
(ii) Tranche 2 Admission (if applicable), pay a waiver fee to
the Lenders which is equal to 20 per cent. of the amount paid by
the subscribers in the Tranche 2 Placing for the Tranche 2 Placing
Shares,
and any such waiver fee shall not be paid by the Company in cash
and shall instead be deemed to be added (pro rata as amongst the
Lenders) to the outstanding Loans under the Facilities
Agreement.
(c) The Facilities Agreement shall remain in full force and
effect and, except as expressly set out in this Agreement, nothing
in this Agreement shall be deemed to be a waiver by the Lenders of,
or consent by the Lenders to, any breach or potential breach
(present or future) of any provision of the Facilities
Agreement.
3.3 Tranche 1 Placing
(a) Each of the Relevant Lenders agrees that it shall:
(i) subscribe in cash (in US$ dollars) for the number of Tranche
1 Placing Shares at the Tranche 1 Placing Price set out against its
name in column 3A of Schedule 1 (for which the aggregate
subscription price shall be its Tranche 1 Subscription Amount);
and
(ii) execute the Tranche 1 Placing Letter on the date of the
Independent Directors' Election and, within 2 Business Days, pay
its Tranche 1 Subscription Amount in cash to the Broker's Agent
Account to be held by the Broker's Agent pending Tranche 1
Admission. For the avoidance of doubt, elections made by Other
Major Shareholders under Clause 3.3(b) will not have any effect on
the subscription for Tranche 1 Placing Shares made by the Relevant
Lenders.
(b) The Company shall:
(i) on the date of the Independent Directors' Election, offer
the Other Major Shareholders a number of Tranche 1 Placing Shares
equal to their Pro-Rata Share of the total Tranche 1 Placing Shares
and such offer shall be open for acceptance at the election of the
Other Major Shareholders for a 10 day period commencing on the date
of the Independent Directors' Election (the "Tranche 1 Offer
Period") on the terms of the Tranche 1 Placing Letters; and
(ii) provide the Relevant Lenders with details of whether the
Other Major Shareholders have elected to participate in the Tranche
1 Placing (including with respect to the amount of each Other Major
Shareholder's allocated subscription at the Tranche 1 Placing
Price) as soon as reasonably practicable after such election is
received.
(c) Tranche 1 Admission will then occur within 5 Business Days
following the end of the Tranche 1 Offer Period, or, if earlier,
the date on which the Company receives a signed Tranche 1 Placing
Letter from each of the Other Major Shareholders approached by the
Company pursuant to Clause 3.3(b)(i).
(d) The Company undertakes that the Tranche 1 Placing Shares
shall carry Voting Rights and be eligible for voting at the
Delisting General Meeting and where required shall adjourn the
Delisting General Meeting until such time as the Tranche 1 Placing
Shares become so eligible.
3.4 Tranche 2 Funding
In the event that the Tranche 2 Loan Trigger is satisfied on or
before 12 April 2016 or such later date not later than 30 May 2016
as may be notified to the Company in writing by the Majority
Lenders (the "Tranche 2 Trigger Date"), each of the Relevant
Lenders hereby agrees to provide the Tranche 2 Funding by way of
the Tranche 2 Loan (in accordance with Clause 3.6). Where the
Tranche 2 Loan Trigger is not satisfied by the Tranche 2 Trigger
Date, each of the Relevant Lenders hereby agrees to provide the
Tranche 2 Funding by way of either the Tranche 2 Placing or the
Tranche 2 Loan (and where required by the Majority Lenders to
support both processes in parallel) as may be directed by the
Majority Lenders.
3.5 Tranche 2 Placing
(a) This Clause is subject to the Tranche 2 Funding being
provided by way of the Tranche 2 Placing in accordance with Clause
3.4.
(b) The Board and the Majority Lenders may agree in writing on
or before the Tranche 2 Trigger Date to increase the number of
Tranche 2 Placing Shares to be subscribed by the Relevant Lenders
and offered to the Other Major Shareholders at the Tranche 2
Placing Price up to an amount agreed between the Majority Lenders
and the Company but, in any event, so that the total size of the
Tranche 2 Placing does not exceed US$4 million (the "Tranche 2
Placing Increase"), in which case, the number of the Tranche 2
Placing Shares that constitute the total Tranche 2 Placing Increase
to be subscribed by each Relevant Lender and any participating
Other Major Shareholder shall be determined pursuant to Clause
3.5(f).
(c) Each of the Relevant Lenders agrees that it shall, on the
Business Day following the Tranche 2 Trigger Date:
(i) subscribe in cash (in US$ dollars) at the Tranche 2 Placing Price for:
(A) the number of Tranche 2 Placing Shares set out against its
name in column 4A of Schedule 1 (for which the aggregate
subscription price shall be its Tranche 2 Subscription Amount);
and
(B) (where, pursuant to Clause 3.5(b), the Majority Lenders and
the Company have agreed to the Tranche 2 Placing Increase) such
additional number of Tranche 2 Placing Shares as may be allocated
to it pursuant to Clause 3.5(f) (for which the aggregate
subscription price shall be its Tranche 2 Subscription Amount
Increase); and
(ii) execute the Tranche 2 Placing Letter.
(d) Each of the Relevant Lenders agrees that it shall pay its
Tranche 2 Subscription Amount and (if applicable) its Tranche 2
Subscription Amount Increase, in cash on the 7(th) Business Day
following the Tranche 2 Trigger Date to the Broker's Agent Account
(or such other account as may be designated for such purpose and
notified to the Relevant Lenders in writing by the Company). For
the avoidance of doubt, elections made by Other Major Shareholders
under Clause 3.5(e) below will not have any effect on the
subscription for Tranche 2 Placing Shares made by the Relevant
Lenders.
(e) The Company shall:
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(i) within 2 Business Days following the Tranche 2 Trigger Date,
offer the Other Major Shareholders a number of Tranche 2 Placing
Shares equivalent to their Pro-Rata Share of the total Tranche 2
Placing Shares (having taken into account all Tranche 2 Placing
Shares to be subscribed for by the Relevant Lenders and offered to
the Other Major Shareholders) and such offer shall be open for
acceptance at the election of the Other Major Shareholders for a
period ending on the 5(th) Business Day following the date that the
offer is made on the terms of the Tranche 2 Placing Letters;
(ii) provide the Relevant Lenders with details of whether the
Other Major Shareholders have elected to participate in the Tranche
2 Placing (including with respect to the amount of each Other Major
Shareholder's allocated subscription at the Tranche 2 Placing
Price) as soon as reasonably practicable after such election is
received;
(iii) upon receipt of an election from any of the Other Major
Shareholders pursuant to Clause 3.5(e)(i) and subject to the
Majority Lenders and the Company agreeing to the Tranche 2 Placing
Increase in accordance with Clause 3.5(b), specify to the Relevant
Lenders the number of Tranche 2 Placing Shares allocated to the
Relevant Lenders in accordance with Clause 3.5(f); and
(iv) within 10 Business Days of receipt of a notice signed by
the Majority Lenders, despatch a new circular (substantially in the
same form as the Delisting Circular) (the "Second Delisting
Circular") to the Shareholders which will include a notice of the
Second Delisting General Meeting containing the resolutions to be
proposed at such a meeting for the purposes of approving Delisting
(and any changes to the Bye-Laws which may be requested by the
Majority Lenders and agreed between the Parties, provided that, to
the extent that the Relationship Agreements and Deed of Undertaking
are in force at such time, the amendments are not inconsistent with
the provisions contained in the Relationship Agreements and Deed of
Undertaking) (the "Second Delisting Resolutions").
(f) The Parties acknowledge that if the Majority Lenders and the
Company agree to the Tranche 2 Placing Increase pursuant to Clause
3.5(b), the additional Tranche 2 Placing Shares arising as a result
of the Tranche 2 Placing Increase shall be allocated between each
of the Relevant Lenders and each of the participating Other Major
Shareholders by the Board as follows: (the "Tranche 2 Allocation
Mechanic"):
(i) with respect to the Relevant Lenders, as agreed between the
Relevant Lenders and the Company (taking into account the offers
made to the Other Major Shareholders pursuant to Clause 3.5(e)(i))
up to any limitations beyond which a mandatory offer would be
required pursuant to Bye-Law 50 of the Bye-Laws (subject to any
relaxation of such limitations permitted by the Bye Laws or the
Relationship Agreements) and thereafter between those remaining
participating Relevant Lenders not subject to such limitations;
and
(ii) with respect to the Other Major Shareholders, based on the
Pro-Rata Share of each participating Other Major Shareholder in
accordance with Clause 3.5(e)(i).
3.6 Tranche 2 Loan
(a) This Clause is subject to the Tranche 2 Funding being
provided by way of the Tranche 2 Loan in accordance with Clause
3.4.
(b) The Company shall notify the Relevant Lenders within 2
Business Days of the Tranche 2 Loan Trigger being satisfied.
(c) Subject to, and on the 5(th) Business Day following, the
Company's notification of satisfaction of the Tranche 2 Loan
Trigger pursuant to Clause 3.6(b) or the Majority Lenders'
notification that the Tranche 2 Loan Trigger has not been satisfied
but the Tranche 2 Funding may be implemented by way of the Tranche
2 Loan (as the case may be), each of the Relevant Lenders hereby
agrees in their capacity as Majority Lenders to provide the Tranche
2 Funding by way of the Tranche 2 Loan as a Second Drawdown (as
defined in the Facilities Agreement) upon the receipt of a Request
(as defined in the Facilities Agreement) approved by the Majority
Lenders for the amount confirmed pursuant to the operation of
clause 5 of the Facilities Agreement and, for the avoidance of
doubt, subject in all respects to the terms of clause 5.3(b) of the
Facilities Agreement.
(d) The Board and the Majority Lenders may agree in writing on
the date that the Majority Lenders approve a Second Drawdown
pursuant to clause 5.3(b) of the Facilities Agreement to increase
the amount of the Tranche 2 Loan up to an amount agreed between the
Majority Lenders and the Company (the "Tranche 2 Loan Increase"),
in which case the funding of the Tranche 2 Loan Increase shall be
made in accordance with the Facilities Agreement and allocated
between the Relevant Lenders as agreed between the Relevant Lenders
and the Company.
3.7 Use of Proceeds
The Company will apply the net proceeds of the Tranche 1 Placing
and the Tranche 2 Funding to meeting the costs and expenses of the
Tranche 1 Placing and the Tranche 2 Funding and restructuring the
Company pursuant to this Agreement, which shall include, but not to
be limited to:
(a) the fees incurred by the Company in connection with the
Tranche 1 Placing and the Tranche 2 Funding, Delisting and/or this
Agreement and the matters contemplated by it;
(b) the fees incurred by the Relevant Lenders to the extent
payable by the Company pursuant to Clause 11.10; and
(c) to the application of the remaining funds in accordance with
the provisions of the Facilities Agreement relating to the use of
proceeds.
3.8 Further Funding
Until 30 May 2016 or, if earlier, until such time as the Maximum
Commitment Amount has been fully utilised by the Company and the
Company requires any additional funding, the Company undertakes
that it shall not take any action or decision under or in
connection with the Facilities Agreement other than in accordance
with this Framework Agreement (including, without limitation, the
making of any Request under the Facilities Agreement) in respect of
any such additional funding requirement without prior consultation
with the Majority Lenders.
4 Implementation
4.1 Company obligations
The Company shall:
(a) make the Signature Press Announcement by releasing it on a
Regulatory Information Service promptly following the execution of
this Agreement, save that if this occurs outside RIS Hours then the
Company will make the Signature Press Announcement at 7:00 a.m. on
the next Business Day;
(b) on the date of any Independent Directors' Election, make the
Election Press Announcement by releasing it on a Regulatory
Information Service promptly following any Independent Directors'
Election, save that if this occurs outside RIS Hours then the
Company will make the Election Press Announcement at 7:00 a.m. on
the next Business Day;
(c) within 5 Business Days of the Independent Directors'
Election, procure that the Board approve the Delisting Circular and
submit it to the Company's printers for printing and despatch to
the Shareholders; and
(d) procure that the Board, subject always to their fiduciary
duties, shall not adjourn the Delisting General Meeting or the
Second Delisting General Meeting save where required to do so under
Clause 3.3(d) above, by law, under the Bye-Laws or with the written
consent of the Majority Lenders.
4.2 Lender obligations
Each of the Relevant Lenders:
(a) shall promptly provide the Company with all information and
assistance as the Company may reasonably require in connection with
the preparation of the Delisting Circular and the Second Delisting
Circular (if applicable) (including input on the sections of the
Delisting Circular and/or the Second Delisting Circular which
detail the Company's strategy after Delisting) and any
supplementary circular to the Delisting Circular and/or the Second
Delisting Circular if required;
(b) shall on the date of this Agreement enter into an
Irrevocable Undertaking that it shall, and shall procure that each
of its Affiliates (to the extent that any such Affiliate holds
Voting Rights) shall:
(i) exercise all of its Voting Rights so as to vote in favour of
each and all the Delisting Resolutions at the Delisting General
Meeting and, if a Second Delisting General Meeting is convened in
accordance with the terms of this Agreement, the Second Delisting
Resolutions at the Second Delisting General Meeting; and
(ii) procure that any potential transferee of any of its Common
Shares enter into an irrevocable undertaking with the Company
substantially in the form contemplated by this Clause 4.2(b) prior
to completing a transfer of any of its Common Shares prior to the
Delisting General Meeting or the Second Delisting General Meeting
(if applicable); and
(c) acknowledges and agrees that this Agreement shall be
described in the Signature Press Announcement and may be attached
to or published with the Signature Press Announcement, Delisting
Circular and Second Delisting Circular and irrevocably agrees to
its name being included in the same in the form and context in
which it appears.
4.3 General
Without limiting Clause 4, the Company agrees to:
(a) use all reasonable endeavours to ensure that Delisting
occurs on the sixth Business Day following the passing of the
Delisting Resolutions at the Delisting General Meeting;
(b) do all such further acts and things and execute all such
documents as may be reasonably necessary or desirable in connection
with Delisting on a prompt and timely basis in order to meet the
timeframes specified in this Clause 4; and
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(c) provide the Relevant Lenders with copies of each of the
Election Press Announcement, the Delisting Circular and any Second
Delisting Circular (as the case may be) at the same time as copies
of the same are provided to the Board for approval at a meeting of
the Board, and, subject to the Board's fiduciary duties, take into
account any reasonable amendments that would not result in a breach
by the Company of the AIM Rules provided by each Relevant Lender in
advance of or at such meeting of the Board in relation to
references to that Relevant Lender in such documents.
5 Governance
5.1 Appointment of New Directors
The Company undertakes to procure that the Board will hold a
meeting of the Board prior to the execution of this Agreement where
it shall resolve to, subject to the Independent Directors'
Election, accept the appointment of up to two nominees as Directors
(the "New Benchmark Directors") nominated for appointment by the
Benchmark Parties pursuant to clause 2.1 of the Benchmark/SEP
Relationship Agreement on and with effect from, and subject to,
Delisting and the Board's prior receipt of each of the Appointment
Letters, provided that if the Delisting Resolutions are not passed
at the Delisting General Meeting, then the appointment of the New
Benchmark Directors will be accepted by the Board within 5 Business
Days of the Delisting General Meeting subject to the Nomad having
provided the required confirmation under clause 2.2 of the
Benchmark/SEP Relationship Agreement and the Board's prior receipt
of each of the Appointment Letters.
6 Continuing Obligations
6.1 Non-conversion of loans
(a) Each of the Relevant Lenders undertakes to the Company that
it shall not, and shall procure that each of its Affiliates shall
not, prior to the earlier of (A) 15 September 2016; and (B) the
date on which the Company ceases to have any Minority
Shareholders:
(i) convert any loans which it or its Affiliates has made or may
make to the Company pursuant to the Facilities Agreement or
otherwise into shares or securities in the Company or any Group
Company or otherwise receive or subscribe for shares or securities
in the Company or any Group Company issued to finance (or which
have the effect of financing) the repayment of such loans;
(ii) take any action which has substantially the same effect as
those set out in Clause 6.1(a)(i) above; or
(iii) propose or vote in favour of resolutions proposed at a
general meeting or sign a written resolution of the Company which
would grant the Directors an authority to issue shares or
securities in the Company for the purposes set out in Clause
6.1(a)(i) or (ii) above.
(b) The Company undertakes to the Relevant Lenders and the
Minority Shareholders that it shall not, prior to the earlier of
(A) 15 September 2016; and (B) the date on which the Company ceases
to have any Minority Shareholders:
(i) convert any loans which have been made to the Company by the
Lenders or any of their Affiliates pursuant to the Facilities
Agreement or otherwise into shares or securities in the Company or
any Group Company or otherwise issue or sell shares or securities
in the Company or any Group Company to finance (or which have the
effect of financing) the repayment of such loans; or
(ii) take any action which has substantially the same effect as
those set out in Clause 6.1(b)(i) above; or
(iii) propose any resolutions of the Company which would grant
the Directors an authority to issue shares or securities in the
Company for the purposes set out in Clauses 6.1(b)(i) or 6.1(b)(ii)
above.
6.2 Statutory squeeze-out rights
Each of the Relevant Lenders undertakes to the Company and to
the Minority Shareholders that it shall not, and shall procure that
each of its Affiliates and its Connected Persons shall not, prior
to the earlier of (A) 31 December 2016; and (B) the date on which
the Company ceases to have any Minority Shareholders, give notice
to any Shareholder to acquire that Shareholder's Common Shares
pursuant to section 103 of the Companies Act.
6.3 Company Website
Each of the Relevant Lenders undertakes to the Company that it
shall, and shall procure that each of its Affiliates shall, and the
Company undertakes to the Relevant Lenders and the Minority
Shareholders that it shall subject to Delisting and until the
earlier of (A) the second anniversary of Delisting; or (B) the date
on which the Company ceases to have any Minority Shareholders, take
all and any actions which may be required to enable the Company to
maintain a website for the Group which shall include:
(a) a copy of this Agreement;
(b) copies of the Company's annual audited accounts and, if
prepared, half-yearly financial reports;
(c) information on all transactions undertaken by the Company or
any Group Company, other than transactions undertaken in the
ordinary course of business, which have a value in excess of US$2
million (including the Required Information);
(d) information on any transactions with Related Parties
(including the Required Information);
(e) details of the Directors and any changes to the Board;
(f) information on any issues of shares in the Company or any
Group Company (other than any issuance of shares by one Group
Company to another Group Company);
(g) information on any dividends declared by the Company or any
Group Company (other than dividends declared by one Group Company
in favour of another Group Company); and
(h) details of any proposed transfer of shares which would
trigger a tag-along offer under the Bye-Laws and details of any
related offer made to Shareholders.
6.4 Matched Trade Service
(a) The Relevant Lenders agree and acknowledge that the Company
is investigating whether, on and subject to and with effect from
Delisting, it is able to make the Matched Trade Service available
at the Company's sole cost.
(b) Each of the Relevant Lenders undertakes to the Company that
it shall not, and shall procure that each of its Affiliates shall
not, use the Matched Trade Service to sell and/or transfer Common
Shares held by them.
(c) Each of the Relevant Lenders undertakes to the Company that it shall:
(i) provide the Bermudan Monetary Authority (the "BMA") with all
and any such information as the BMA may reasonably require in order
for the BMA to grant a general permission for the transfers of
Common Shares carrying up to 10% of the aggregate Voting Rights of
the Company and in connection with the setting up of the Matched
Trade Service; and
(ii) subject to Delisting and until the second anniversary of
Delisting, use reasonable endeavours to enable the Company to make
the Matched Trade Service available (including, but not limited to,
the engagement of the Depositary and the maintenance of the DI
Register) at the Company's sole cost.
(d) If for any reason the Company cannot make a Matched Trade
Service available, the Company will use reasonable endeavours to
put in place alternative trading procedures and the Parties
undertake to use reasonable endeavours to assist with this.
7 Remedies
7.1 Remedies
In view of the difficulties in placing a monetary value upon the
effects of any breach of the terms of the undertakings referred to
in this Agreement, each of the Parties recognises that the other
Parties and the Minority Shareholders may be entitled to seek
injunctive relief as well as any other relief which may be
appropriate under the circumstances in any court of competent
jurisdiction in the event of any breach or anticipatory breach of
the obligations set out above.
8 Warranties
8.1 Relevant Lenders
Each of the Relevant Lenders warrants and confirms to the
Company that the Common Shares beneficially owned by it are free
from all liens, charges, encumbrances and third party rights, and
that it has full power and authority to perform its obligations
under this Agreement.
8.2 Company
The Company warrants that it has full power and authority to
perform its obligations under this Agreement.
9 Governing Law and Jurisdiction
9.1 English law
This Agreement and any non-contractual obligations arising out
of it or in connection with it are governed by, and shall be
construed in accordance with, English law.
9.2 English jurisdiction
The Parties submit to the non-exclusive jurisdiction of the
English courts in respect of any claim, dispute or difference
arising out of or in connection with this Agreement and agree that,
in respect of proceedings in England or any other jurisdiction,
process may be served on any of them in the manner specified for
notices in Clause 10.
9.3 Appointment of process agent
Each of the Parties irrevocably appoints Elemental CoSec Limited
of 27 Old Gloucester Street, London, WC1N 3AX United Kingdom, as
its agent for service of process in respect of proceedings before
such courts.
9.4 Service on process agent
Any communication served on the agent referred to in Clause 9.3
shall be deemed served in accordance with the provisions of Clause
10. If such agent (or any replacement agent appointed pursuant to
this Clause 9.4) at any time ceases for any reason to act as such,
the relevant appointer irrevocably agrees to appoint a replacement
agent for service of process having an address for service in
England and shall notify the other Parties of the name and address
of such replacement agent in writing within 20 Business Days of
such other agent ceasing to act. Failing such appointment and
notification, the other Parties shall be entitled by notice to the
relevant appointer to appoint such a replacement agent on its
behalf.
9.5 Meaning of "proceedings"
(MORE TO FOLLOW) Dow Jones Newswires
March 02, 2016 02:01 ET (07:01 GMT)
In this Clause 9, "proceedings" means proceedings of any kind,
including an application for a provisional or protective
measure.
10 Notices
10.1 General
Any notice or other document to be served under this Agreement
must be in writing and may be delivered or sent by pre-paid first
class letter post (or registered airmail in the case of an address
outside of the United Kingdom) or facsimile transmission to the
Party to be served at that Party's address set out in this
Agreement or at such other address or number as that Party may from
time to time notify in writing to each other Party to this
Agreement or any other usual address or in any other manner
permitted by the law of the place of service or the law of the
jurisdiction where proceedings are instituted.
10.2 Date and time of delivery
Any notice or document shall be deemed served:
(a) if delivered, at the time of delivery;
(b) if sent by first-class post to an address in the United
Kingdom, on the second Business Day after the date on which it was
posted;
(c) if sent by registered airmail to an address outside of the
United Kingdom, on the 5(th) Business Day after the date on which
it was posted; or
(d) if sent by facsimile transmission, at the time of
transmission if between the hours of 9.00 am and 5.00 pm on a
Business Day or otherwise at 9.00 am on the next Business Day.
10.3 Proof of service
In proving service (without prejudice to any other means):
(a) by post, it shall only be necessary to prove the notice or
document was contained in an envelope properly stamped and posted
as provided in this Clause 10; or
(b) by facsimile transmission, it shall be necessary to prove
that the notice or document was duly received by production of a
copy fax bearing the addressee's automatic record of correct
transmission.
11 Miscellaneous
11.1 Assignment
This Agreement is personal to the Parties and the rights and
obligations of the Parties may not be assigned or otherwise
transferred without the prior written consent of the other Parties
(such consent not to be unreasonably withheld or delayed by the
other Parties).
11.2 Further assurance
Each Party shall use reasonable endeavours from time to time do
or procure to be done all such further acts and things and execute
or procure the execution of all such other documents as may be
reasonably necessary to give effect to the provisions of this
Agreement.
11.3 Third Party rights
(a) Subject to Clause 11.3(b), this Agreement is made for the
benefit of the Parties and their successors and permitted assigns
only and is not intended to benefit, and no term thereof shall be
enforceable by, any other person by virtue of the Contracts (Rights
of Third Parties) Act 1999 by any person not a Party to it.
(b) Clauses 6.1(b), 6.2 and 6.3 (and in the case of Clause 6.3
with respect to obligations of the Company but not the Relevant
Lenders) are intended to benefit the Minority Shareholders and
shall be enforceable in accordance with the Contracts (Rights of
Third Parties) Act 1999, notwithstanding that the Minority
Shareholders are not a party to this Agreement.
(c) Clauses 6.1(b), 6.2 and 6.3 may not be amended, varied or
waived in any way and at any time by the Parties without the
Approval of the Minority Shareholders.
11.4 Waiver
No waiver of any term, provision or condition of this Agreement
shall be effective except to the extent made in writing and signed
by the waiving Party. No omission or delay on the part of any Party
in exercising any right, power or privilege under this Agreement
shall operate as a waiver by it of any right to exercise it in
future or of any other of its rights under this Agreement.
11.5 Variation
No variation of this Agreement shall be effective unless made in
writing and signed by all the Parties.
11.6 Counterparts
This Agreement may be executed in any number of counterparts and
by the several Parties on separate counterparts each of which, when
so executed, shall be an original, but all counterparts shall
together constitute one and the same instrument.
11.7 Invalidity
The invalidity, illegality or unenforceability of any provision
of this Agreement shall not affect the other provisions of this
Agreement.
11.8 Conflict with Bye-Laws
In the event of any conflict or inconsistency between the
Bye-Laws and the provisions of this Agreement the Parties shall use
their reasonable endeavours to procure that the terms of the
Bye-laws are amended so as to accord with the provisions of this
Agreement.
11.9 Rights and obligations are several
The rights and obligations of the Relevant Lenders pursuant to
this Agreement are several.
11.10 Costs
Each Party shall bear its own costs incurred in connection with
this Agreement save that the Company shall bear the fees incurred
by the Relevant Lenders in connection with this Agreement up to an
amount of US$180,000, which shall include, but not be limited to,
the fees of the Relevant Lenders' English law solicitors.
THIS DOCUMENT has been executed as a deed by or on behalf of the
Parties and has, on the date stated at the beginning of this
Agreement, been delivered as a deed.
Schedule 1
The Relevant Lenders
Name and Address Number of Common Tranche 1 Tranche 1 Tranche 2 Tranche 2
(1) Shares held (2) Placing Shares Subscription Placing Shares Subscription
(3A) Amount (3B) (4A) Amount (4B)
----------------- ----------------------- ----------------- ----------------- ----------------- -----------------
Outrider Master
Fund, LP
c/o Elian
Fiduciary
Services
(Cayman)
Limited, 89
Nexus Way,
Camama Bay,
Grand Cayman
KY1-9007,
Cayman Islands 187,790,232 35,909,221 US$500,000 47,878,962 US$500,000
----------------- ----------------------- ----------------- ----------------- ----------------- -----------------
The John Paul
Dejoria Family
Trust
2934 Oestrisk
Lane, Austin,
Texas, 78733,
USA 42,358,657 35,909,221 US$500,000 47,878,962 US$500,000
----------------- ----------------------- ----------------- ----------------- ----------------- -----------------
BMk Resources
Limited
PO Box 309,
Ugland House,
Grand Cayman
KY1-1104, the
Cayman Islands 206,823,648 71,818,443 US$1,000,000 95,757,924 US$1,000,000
----------------- ----------------------- ----------------- ----------------- ----------------- -----------------
Schedule 2
Delisting Resolutions
1. THAT subject to and conditional on the passing of Resolution
2, the admission of the Company's common shares of par value
US$0.001 each to trading on AIM, a market operated by the London
Stock Exchange plc, be cancelled (the "De-listing") and that each
of the directors and officers of the Company be authorised and
directed to execute and deliver any and all documents and take all
actions as he may consider necessary or expedient in connection
with the De-listing.
2. THAT subject to and conditional on the passing of Resolution
1, the third amended and restated bye-laws (attached as Schedule 1
to this notice of special general meeting) be approved and adopted
by the Company as the new bye-laws of the Company in substitution
for and to the exclusion of the existing bye-laws of the Company
with effect from the De-listing.
Execution PageS
EXECUTED as a DEED on behalf of )
MADAGASCAR OIL Limited )
a company incorporated in Bermuda )
by )
being a person who, in accordance with )
the laws of that territory is acting under )
the authority of the company, )
in the presence of a witness: )
Authorised signatory:
Signature of witness:
Name of witness:
Address of witness:
EXECUTED as a DEED on behalf of )
BMK RESOURCES LIMITED )
a company incorporated in the Cayman Islands )
by )
being a person who, in accordance with )
the laws of that territory is acting under )
the authority of the company, )
in the presence of a witness: )
Authorised signatory:
Signature of witness:
Name of witness:
Address of witness:
EXECUTED as a DEED on behalf of )
outrider master fund, lp )
a company incorporated in the Cayman Islands )
by )
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Madagascar Oil (LSE:MOIL)
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