EXHIBIT 4.1
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CANARGO ENERGY CORPORATION
US $25,000,000.00
Senior Secured Notes due July 25, 2009
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NOTE PURCHASE AGREEMENT
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DATED JULY 25, 2005
TABLE OF CONTENTS
(Not a part of the Agreement)
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SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................1
SECTION 3. SECURITY...............................................................................1
Section 3.1. Grant of Security Interests............................................................1
SECTION 4. CLOSING................................................................................2
SECTION 5. CONDITIONS TO CLOSING..................................................................3
Section 5.1 Conditions to Purchaser's Obligation to Purchase Notes.................................3
Section 5.1.1. Representations and Warranties.........................................................3
Section 5.1.2. Performance; No Default................................................................3
Section 5.1.3. Compliance Certificates................................................................3
Section 5.1.4. Opinions of Counsel....................................................................4
Section 5.1.5. Purchase Permitted by Applicable Law, etc..............................................4
Section 5.1.6. Loan Documents.........................................................................4
Section 5.1.7. Proceedings and Documents..............................................................4
Section 5.1.8. Subsidiary Guaranties..................................................................4
Section 5.1.9. Due Diligence..........................................................................4
Section 5.2 Conditions to Obligations of the Company...............................................4
Section 5.2.1 Representations and Warranties.........................................................4
Section 5.2.2. Performance............................................................................5
Section 5.2.3. Proceedings and Litigation.............................................................5
Section 5.2.4. Proceedings and Documents..............................................................5
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................5
Section 6.1. Organization; Power and Authority......................................................5
Section 6.2. Authorization, etc.....................................................................5
Section 6.3. Disclosure.............................................................................6
Section 6.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.......................6
Section 6.5. Financial Statements...................................................................6
Section 6.6. Compliance with Laws, Other Instruments, etc...........................................7
Section 6.7. Governmental Authorizations, etc.......................................................7
Section 6.8. Litigation; Observance of Agreements, Statutes and Orders..............................7
Section 6.9. Taxes..................................................................................7
Section 6.10. Title to Collateral; Assets of the Company.............................................8
Section 6.11. Licenses, Permits, etc.................................................................8
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Section 6.12. Benefit Plan Compliance................................................................8
Section 6.13. Private Offering by the Company........................................................9
Section 6.14. Use of Proceeds; Margin Regulations....................................................9
Section 6.15. Existing Indebtedness; Future Liens....................................................9
Section 6.16. Foreign Assets Control Regulations, etc...............................................10
Section 6.17. Status under Certain Statutes.........................................................10
Section 6.18. Environmental Matters.................................................................10
Section 6.19. Basic Documents.......................................................................11
Section 6.20. Solvency..............................................................................11
SECTION 7. REPRESENTATIONS OF THE PURCHASER......................................................12
Section 7.1 Due Authorization; Absence of Conflicts; Enforceability; Purchase for
Investment, etc.......................................................................12
Section 7.2 Access to Information.................................................................13
Section 7.3. Source of Funds.......................................................................13
SECTION 8. INFORMATION AS TO COMPANY.............................................................14
Section 8.1. Financial and Business Information....................................................14
Section 8.2. Officer's Certificate.................................................................17
Section 8.3. Inspection............................................................................18
SECTION 9. PREPAYMENT OF THE NOTES; CHANGE IN CONTROL............................................18
Section 9.1. Optional Prepayments..................................................................18
Section 9.2. Allocation of Partial Prepayments.....................................................18
Section 9.3. Maturity; Surrender, etc..............................................................19
Section 9.4. Purchase of Notes.....................................................................19
Section 9.5. Redemption Price......................................................................19
Section 9.6. Change in Control.....................................................................19
SECTION 10. AFFIRMATIVE COVENANTS.................................................................21
Section 10.1. Compliance with Law...................................................................21
Section 10.2. Insurance.............................................................................21
Section 10.3. Maintenance of Properties.............................................................22
Section 10.4. Payment of Taxes and Claims...........................................................22
Section 10.5. Corporate Existence, etc..............................................................22
Section 10.6. Additional Subsidiaries...............................................................22
Section 10.7. Conversion of Note....................................................................23
Section 10.8. Additional Security...................................................................24
Section 10.9. Payment of Special Counsel and Other Fees.............................................24
Section 10.10. Payment of Placement Fee..............................................................24
Section 10.11 Termination of Cornell Facilities.....................................................24
SECTION 11. NEGATIVE COVENANTS....................................................................25
Section 11.1. Transactions with Affiliates..........................................................25
Section 11.2. Merger, Consolidation, etc............................................................25
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Section 11.3. Liens.................................................................................25
Section 11.4. Priority..............................................................................27
Section 11.5. Line of Business......................................................................27
Section 11.6. Restricted Payments...................................................................28
Section 11.7. Sale-and-Leasebacks...................................................................28
Section 11.8. Sale of Assets, etc...................................................................28
Section 11.9. Future Indebtedness...................................................................29
Section 11.10. Basic Documents.......................................................................29
Section 11.11. Anti-takeover Defense.................................................................30
SECTION 12. EVENTS OF DEFAULT.....................................................................31
SECTION 13. REMEDIES ON DEFAULT, ETC..............................................................33
Section 13.1. Acceleration..........................................................................33
Section 13.2. Other Remedies........................................................................34
Section 13.3. Collateral............................................................................34
Section 13.4. Costs and Expenses....................................................................34
Section 13.5. Rescission............................................................................34
Section 13.6. No Waivers or Election of Remedies, Expenses, etc.....................................35
SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................35
Section 14.1. Registration of Notes.................................................................35
Section 14.2. Transfer and Exchange of Notes........................................................35
Section 14.3. Replacement of Notes..................................................................36
SECTION 15. PAYMENTS ON NOTES.....................................................................36
Section 15.1. Place of Payment......................................................................36
Section 15.2. Home Office Payment...................................................................36
SECTION 16. EXPENSES, ETC.........................................................................37
Section 16.1. Transaction Expenses..................................................................37
Section 16.2. Survival..............................................................................37
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................38
SECTION 18. AMENDMENT AND WAIVER..................................................................38
Section 18.1. Requirements..........................................................................38
Section 18.2. Solicitation of Holders of Notes......................................................38
Section 18.3. Binding Effect, etc...................................................................39
Section 18.4. Notes Held by Company, etc............................................................39
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SECTION 19. NOTICES...............................................................................39
SECTION 20. REPRODUCTION OF DOCUMENTS.............................................................40
SECTION 21. CONFIDENTIAL INFORMATION..............................................................40
SECTION 22. SUBSTITUTION OF PURCHASER.............................................................41
SECTION 23. MISCELLANEOUS.........................................................................42
Section 23.1. Successors and Assigns................................................................42
Section 23.2. Payments Due on Non-Business Days.....................................................42
Section 23.3. Severability..........................................................................42
Section 23.4. Construction and Interpretation.......................................................42
Section 23.5. Counterparts..........................................................................43
Section 23.6. Governing Law.........................................................................43
Section 23.7. Submission to Jurisdiction............................................................43
Section 23.8 Appointment of Agent for Service of Process...........................................43
Section 23.9. Company Indemnification...............................................................44
Signatures........................................................................................................1
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SCHEDULE A -- Information Relating To Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 5.11 -- Subsidiary Guarantors
SCHEDULE 6.3 -- Disclosure Materials
SCHEDULE 6.4 -- Subsidiaries of CanArgo
SCHEDULE 6.5 -- Financial Statements
SCHEDULE 6.8 -- Certain Litigation
SCHEDULE 6.11 -- Licenses, Permits, etc.
SCHEDULE 6.14 -- Use of Proceeds
SCHEDULE 6.15 -- Existing Indebtedness
SCHEDULE 6.18 -- Environmental Matters
SCHEDULE 6.19 -- Basic Agreements
SCHEDULE 11.1 -- Transactions with Affiliates
SCHEDULE 11.8 -- Permitted Farmout Counterparties