Exhibit 10.4
AGREEMENT
THIS AGREEMENT ("Agreement"), in respect of the Convertible First
Preferred Shares, Series A (the "Preferred Shares"), and the Common Shares,
no par value ("Common Shares") of Denbury Resources Inc. (the "Company"),
held by TPG Partners, L.P. and TPG Parallel, L.P., both Delaware limited
partnerships (collectively "TPG"), is entered into as of the 29th day of
August, 1996 by and between the Company and TPG.
W I T N E S S E T H
WHEREAS, the Company and TPG are parties to that certain Securities
Purchase Agreement dated effective November 13, 1995, whereby TPG purchased:
(i) 8,333,333 Common Shares, (ii) 1,500,000 Preferred Shares and (iii)
warrants entitling TPG to purchase 1,250,000 Common Shares ("Warrants"), for
a total consideration of $40,000,000, under the terms, mutual covenants and
agreements set forth in the Securities Purchase Agreement and in appendices
thereto; and
WHEREAS, the Company and TPG are parties to that certain Registration
Rights Agreement dated effective as of December 21,1995, whereby the Company
agreed to provide TPG with certain rights with respect to the registration of
the Company's securities under the Securities Act of 1933; and
WHEREAS, the Company and TPG desire to amend certain terms of the
Preferred Shares and other terms and covenants set forth in the Securities
Purchase Agreement and appendices thereto and the Registration Rights
Agreement, to better position the Company for an upcoming underwritten public
offering in the United States by the Company of its Common Shares
("Offering"), which is expected to occur on or about the week of November 18,
1996;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
Conversion of Preferred Shares
Pursuant to Article 8 of the Series Provisions Attaching to the
Convertible First Preferred Shares, Series A ("Preferred Share Terms"), TPG
hereby consents to an amendment to the Preferred Share Terms as described in
the resolution attached hereto as Exhibit A, and agrees to execute a form of
such resolution, in its capacity as the holder of the Preferred Shares, in
lieu of a special meeting of the preferred shareholders, to approve an
amendment to the Articles of Continuance of the Company ("Preferred
Amendment"). Furthermore, TPG agrees to vote, in person or by proxy, at the
Special Meeting of the shareholders to be held on October 9, 1996 (the
"Special Meeting"), its 8,333,333 Common Shares in favor of the Special
Resolution to approve the Preferred Amendment.
ARTICLE 2
Waiver of Preemptive Rights
TPG hereby waives its rights, pursuant to Section 4.18(a) of the
Securities Purchase Agreement, to purchase or acquire equity securities of
the Company identical to securities offered by the Company in order to
maintain its pro rata ownership in the equity securities of the Company,
with respect only to the following issuances: (i) Common Shares issued
pursuant to the Offering, and (ii) Common Shares issued for the interest due
on conversion, subject to shareholder approval, of the Cdn. $2,000,000 of 9
1/2% Convertible Debentures of the Company prior to the Offering, as further
described in the Company's Information Circular-Proxy Statement pertaining to
the Special Meeting. TPG furthermore waives its right, pursuant to Section
4.18(b) of the Securities Purchase Agreement, to receive a written notice
from the Company of the terms of the issuances of the Common Shares set forth
above and other matters set forth in Section 4.18(a).
ARTICLE 3
Waiver of Registration Rights
TPG hereby agrees to waive its rights pursuant to Section 2 of the
Registration Rights Agreement to have any of its Common Shares, including any
Common Shares received upon the conversion of its Preferred Shares, or any of
its Preferred Shares included in the Offering or otherwise registered by the
Company in connection with the Offering. TPG reserves all other rights
pursuant to the Registration Rights Agreement, which continues in full force
and effect, except as set forth in this Article 3 with respect to the
Offering.
ARTICLE 4
Miscellaneous
Section 4.1. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by the final, nonappealable order of a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the terms, provisions, covenants, and restrictions hereof shall
remain in full force and effect and shall in no way be affected, impaired, or
invalidated.
Section 4.2. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
Section 4.3. Expiration. Notwithstanding anything to the contrary
contained herein, the agreements of TPG set forth in the second paragraph of
Article II and the first sentence of Article III shall expire if the offering
shall not have occurred by January 18, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
THE COMPANY:
Denbury Resources, Inc.
By: ______________________________
▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
TPG:
TPG Partners, L.P.
By: TPG GenPar, L.P., its general partner
By: TPG Advisors, its general partner
By: ______________________________
Name: ____________________________
Title: ___________________________
TPG Parallel, L.P.
By: TPG GenPar, L.P., its general partner
By: TPG Advisors, its general partner
By: ______________________________
Name: ____________________________
Title: ___________________________
EXHIBIT A
RESOLUTION of all of the holders of Convertible
First Preferred Shares, Series A of Denbury
Resources Inc. (the "Corporation") passed
effective the 29th day of August, 1996 pursuant
to the provisions of Section 142 of the Canada
Business Corporations Act
AMENDMENT TO PREFERRED SHARE CONVERSION TERMS
BE IT RESOLVED, THAT:
1. pursuant to section 173(1)(g) of the Canada Business
Corporations Act, the rights, privileges, restrictions and conditions (the
"Preferred Share Terms") attaching to the outstanding Convertible First
Preferred Shares, Series A (the "Preferred Shares") of the Corporation, be
and the same are hereby modified and amended to enable the Corporation to
have the right to require the holders of the Preferred Shares to exercise
their conversion rights set forth in Section 3.1 of the Preferred Share Terms
in respect of all, but not less than all, the Preferred Shares held by such
holders, at any time, provided that if such mandatory conversion right is
exercised by the Corporation at any time prior to January 1, 1999, the
Preferred Shares shall be convertible into Common Shares at the conversion
rate in effect as at January 1, 1999, and specifically, the provisions of
Section 3.3 of the Preferred Share Terms be and the same are hereby amended
by the deletion of the first sentence thereof and the substitution therefor
of the following:
"Notwithstanding the foregoing, the Corporation
shall have the right to require the holders of the
First Preferred Shares, Series A to exercise their
conversion rights set forth in Section 3.1 in
respect of all, but not less than all, the First
Preferred Shares, Series A held by such holders
provided that if such right is exercised by the
Corporation at any time prior to January 1, l999,
the First Preferred Shares, Series A shall be
convertible into fully paid and nonassessable
Common Shares on the Current Conversion Basis in
effect as at January 1, 1999."
2. the issuance of the Common Shares of the Corporation on conversion of
the Preferred Shares in accordance with the rights, privileges, restrictions
and conditions attached to such Preferred Shares, as modified hereby, be and
the same is hereby authorized and approved; and
3. any one director or officer of the Corporation is hereby authorized
to file Articles of Amendment to effect the aforesaid amendment to the
Preferred Share Terms with the Director appointed under the Canada Business
Corporations Act and to do and perform all such further acts and things and
to execute all such other deeds, documents and other instruments as may be
necessary or desirable in order to carry out the provisions of this
resolution;
TPG PARTNERS, L.P.
By: TPG GenPar, L.P.
By: TPG Advisors, Inc.
By: _______________________________
TPG PARALLEL, L.P.
By: TPG GenPar, L.P.
By: TPG Advisors, Inc.
By: _______________________________
