EXHIBIT 10(31)
THIS AGREEMENT is made on 14 October 2002 between:-
(1) CANARGO LIMITED, a company incorporated and carrying on its activities
under the laws of Guernsey, having its registered offices at XX Xxx
000, Xxxxxxxx Xxxxx Xxx Xxxxxxx, Xx. Xxxxxx Port, Guernsey (hereinafter
"CANARGO"); and
(2) WESTRADE ALLIANCE LLC a Limited Liability Company incorporated under
the laws of the State of Oregon and having its registered office at
0000 X.X Xxxxxxx Xxxxxx #000, Xxxxxxxx Xxxxxx 00000 (hereinafter the
"PURCHASER"), as legally represented by Xx Xxxxxx Pkhakadze pursuant to
a power of attorney granted by the Purchaser dated October 1-st, 2002.
WHEREAS:
(A) CanArgo is the beneficial and registered owner of the entire issued
share capital (the "SALE SHARES") of CanArgo Petroleum Products
Limited, details of which are set out in Schedule 1 to this Agreement
(the "COMPANY"); and
(B) CanArgo is willing to sell and the Purchaser is willing to purchase the
Sale Shares for the consideration and upon the terms and conditions set
out in this Agreement.
IT IS AGREED:-
1 STRUCTURE
Subject to the terms of this Agreement CanArgo shall sell, and the
Purchaser shall purchase, the Sale Shares.
2 PRICE
2.1 The consideration (the "CONSIDERATION") payable by the Purchaser to
CanArgo for the Sale Shares is US$4,000,000 payable on the dates and in
the amounts set out below (the "PAYMENT SCHEDULE"):-
AMOUNT TIME FOR PAYMENT
------ ----------------
US$500,000 (the "FIRST PAYMENT") 1 month following the date of this Agreement
US$500,000 (the "SECOND PAYMENT") 14 January 2003
US$3,000,000 (the "FINAL PAYMENT") 14 August 2003
2.2 Any of the First, Second or Final Payments will be deemed to be made on
the date ("PAYMENT DATE") when the respective Payment has been credited
to CanArgo's bank account indicated in the Article 3.1 below.
2.3 In the event that payment of the Consideration is not made in
accordance with the Payment Schedule interest shall accrue daily at the
rate of 16% per annum on any part of the Consideration which is not
paid in accordance with the Payment Schedule.
2.4 In the event that either the First Payment or the Second Payment are
not made on the due date or if the Final Payment is not made on or
before 30 September 2003 CanArgo shall be entitled to terminate this
Agreement forthwith and any of the Consideration which has been paid by
the Purchaser shall not be repaid to the Purchaser but shall be
retained by CanArgo by way of a non-refundable deposit. In the event of
termination by CanArgo in the
circumstances envisaged by Clause 2.4, the Purchaser shall have no
claim whatsoever against CanArgo.
The Payment Schedule shall only be amended in writing by the parties
hereto. Where any payment falls due on a date which is not a business
day, the payment shall be due on the immediately preceding business
day.
3 SECURITY AND CONDUCT OF THE COMPANY PENDING PAYMENT OF THE
CONSIDERATION
3.1 The Purchaser will become the legal and beneficial owner of the Sale
Shares only following payment in full of the Consideration and any
interest due thereon by the Purchaser and receipt of cleared funds by
CanArgo in the undernoted account:-
Bank: HSBC Bank International Limited
Account: 000-000000-000
Name: CanArgo Limited USD Account
Instructions for transferring funds are as follows:
Correspondent Bank:
Bankers Trust Company
1 Bankers Trust Xxxxx
Xxxxxxx Xxxxxx
Xxx Xxxx XX 00000
A/C No: 00000000
SWIFT: XXXXXX00
For further credit of:
CanArgo Limited USD Account
Account Number: 000-000000-000
HSBC Bank International Limited
XX Xxx 000
Xx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
Channel Islands
SWIFT: MIDLJESH
Payment will be made by way of Bank Transfers and will not be subject
to any withholding tax or any other deductions.
3.2 CanArgo confirms that as at the date hereof it controls the business
and affairs of the Company and that it will continue to do so until the
Final Payment is made by the Purchaser. CanArgo confirms that to the
extent possible, it shall continue to run the business and affairs of
the Company in the ordinary course. CanArgo and the Purchaser confirm
that until Completion CSOP will continue to be run in the ordinary
course.
3.3 CanArgo and the Purchaser agree that all dividends declared from the
date hereof until Completion will be for the Purchaser's benefit
subject to Completion taking place.
4 WARRANTIES
4.1 CanArgo warrants that as at the date of Completion:
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4.1.1 it will be the registered and beneficial owner of the Sale Shares and
that the Sale Shares will be free of any charges, liens or
encumbrances; and
4.1.2 the Company's only asset will be 50% of the Charter Fund of CSOP and
that the Company shall at the date of Completion have no liabilities.
4.2 No other warranty, whether express or implied is given by CanArgo to
the Purchaser.
5 COMPLETION
5.1 Completion of the sale and purchase of the Sale Shares ("COMPLETION")
shall take place immediately following receipt of the Final Payment by
CanArgo.
5.2 At Completion, CanArgo shall deliver the following:-
5.2.1 transfers of the Sale Shares duly executed by CanArgo in favour of the
Purchaser together with the definitive certificates in respect thereof
in the names of CanArgo;
5.2.2 a written waiver in the agreed form from CanArgo in respect of any
claims which CanArgo (and any member of CanArgo's group) may have
against the Company and CSOP as at Completion and releasing the Company
and CSOP from all and any liabilities which may be owing to CanArgo or
any member of CanArgo's group by the Company or CSOP;
5.2.3 the resignation referred to in clause 7.2;
5.2.4 resignations of Xxxxx Xxxxxx and Xxxxxxx Xxxxxxx as directors of CSOP
5.3 At Completion, the Purchaser shall deliver a written waiver in the
agreed form from the Company and CSOP in respect of any claims which
the Company or CSOP may have against CanArgo and any member of
CanArgo's group as at Completion and releasing CanArgo and any member
of CanArgo's group from all and any liabilities which may be owing to
either the Company or CSOP by CanArgo or any member of CanArgo's group.
5.3.1 The Purchaser shall be responsible for obtaining all consents, waivers
and approvals to the Acquisition.
5.4 For the purposes of this Clause 5, `CanArgo's group' means any holding,
subsidiary or associated company CanArgo or any subsidiary or
associated company of any such holding company.
6 LICENCE
6.1 Subject to Completion taking place CanArgo hereby grants to CSOP a 10
year licence (subject to clause 6.3) (the "LICENCE") entitling CSOP to
use the name "CanArgo Standard Oil Products" (the "NAME") solely for
the purpose of petrol retailing.
6.2 CSOP shall be bound to use the Name in carrying on its business for not
less than 2 years from the date on which Completion takes place unless
and until a majority shareholding of CSOP is disposed to a major,
recognised international petrol retailer.
6.3 There shall be no fee for the first 2 years of the Licence but
thereafter CSOP shall pay CanArgo on 31st December each year a royalty
fee of US$10,000 per annum as consideration for the Licence.
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6.4 CanArgo will have the right to terminate the Licence on demand if
CanArgo's name is brought into disrepute or for misuse of the Name by
CSOP or failure to pay any royalty pursuant to clause 6.3.
7 DIRECTORS
7.1 To the extent that it is able, CanArgo shall procure that Dr Xxxxx
Xxxxxx, Xxxxxxx XxXxxxxxx and Xxxxxxxxx Xxxxxxx (the "CURRENT
DIRECTORS") will remain directors of the Company from the date hereof
until the date of Completion.
7.2 At Completion, CanArgo shall deliver the written resignation of each of
the Current Directors unless the Current Directors agree with the
Purchaser to remain as directors of the Company after Completion.
8 ENTIRE AGREEMENT
This letter constitutes the entire understanding and agreement of the
parties with respect of the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings written or oral
regarding the subject matter of this letter.
9 CONFIDENTIALITY
9.1 All parties undertake:-
9.1.1 To keep confidential the existence and terms of this letter; and
9.1.2 Not to disclose the same to any other person unless expressly
authorised by the board of directors of CanArgo save for the purposes
of:-
(a) Seeking legal or accounting advice in relation to its terms;
and
(b) Disclosing the same to a competent authority or stock
exchange, as required by law.
10 FEES, COSTS AND EXPENSES
The parties shall each bear their own professional and other costs and
expenses including, without limitation, any taxation associated with
the Acquisition.
11 ANNOUNCEMENTS
No announcement (whether internal or external) or press communication
or release of information concerning this letter or Acquisition in
connection with the Acquisition shall be made by any party other than
as agreed between the parties save for any announcement required by
applicable law or regulatory authority.
12 GOVERNING LAW AND JURISDICTION
12.1 This letter shall be governed and construed in accordance with the law
of England.
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12.2 Each party hereby irrevocably 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 letter and its implementation
and effect.
IN WITNESS WHEREOF, these presents consisting of this and the preceding 3 pages
are executed as follows:
SUBSCRIBED for and on behalf of
CANARGO LIMITED
at St Xxxxx Port, Guernsey
on the 14th day
of October 2002
by
/s/Dr Xxxxx Xxxxxx........................ Director
Dr Xxxxx Xxxxxx........................... Full Name
/s/Xxxxxxxxx Xxxx Xxxxxxx................. Director
Xxxxxxxxx Xxxx Xxxxxxx.................... Full Name
SUBSCRIBED for the said
WESTRADE ALLIANCE LLC by its Attorney under Power of Attorney
dated October 1-st, 2002
at St Xxxxx Port, Guernsey
on the 14th day of October 2002
/s/Samson Pkhakadze....................... Attorney
Samson Pkhakadze ......................... Full Name
before this witness
/s/Xxxx Xxxxxxxx Xxxxxxxx................. Witness
Xxxx Xxxxxxxx Davidson.................... Full Name
70 Wellington St.......................... Address
Glasgow...................................
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SCHEDULE 1
DETAILS OF THE COMPANY
NAME: CanArgo Petroleum Products Limited
DATE OF INCORPORATION: 25 August 1998
REGISTERED NUMBER: N: 34379
REGISTERED OFFICE: XX Xxx 000, Xxxxxxxx Xxxxx Xxx Xxxxxxx, Xx. Xxxxxx Port, Guernsey
AUTHORISED SHARE CAPITAL: L10,000 divided into 10,000 Ordinary Shares of L1.00 each
ISSUED SHARE CAPITAL: 2 Ordinary Shares of L1.00 each
DIRECTORS: Dr Xxxxx Xxxxxx, Xxxxxxx XxXxxxxxx, Xxxxxxxxx Xxxxxxx
SECRETARY: C.M.S. Limited
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