with British military support. They had applied to the nizam, offering to pay rent well above that he was currently receiving from the nawab of Arcot; the nizam rejected their offers. Lord Robert Clive next applied to Mughal Emperor Shah Alam II, who in August 1765 issued a decree granting the company rights to that territory. At the same time, the nizam was involved in an alliance with the Marathas. Both he and the Marathas' ruling peshwa, Madhavrao I were concerned over the expansionist threat posed by Hyder Ali. After assisting the Marathas in dealing with one of their confederates 1765, the allies began developing plans to invade Mysore. When the British began occupying the Northern Circars in March 1766, the nizam objected, issuing threatening letters to company authorities in Madras. He considered going to war against the company, but his poor financial condition made this impossible. Instead he negotiated a treaty with the company in November 1766. Under its terms the company received four of the five circar immediately (Guntur, the fifth, having been granted to the nizam's son as a jaghir, was to be delivered upon the son's death) in exchange for 7 lakh rupees or military support to the nizam in his endeavours. One historian describes the nizam's agreement to the treaty as one of financial necessity, and that he was "resentful" of English power. Pursuant to this treaty, the company provided two battalions of troops to the nizam. Under the treaty, there were no limits placed on the number of troops the nizam could request, nor were there checks on the uses (offensive or defensive) to which he could put them. Conflict involving Madras authorities, Muhammed Jinnah and Tipu Sultan, was also simmering. Muhammed Ali Khan Wallajah, allied to the British, whose territory his surrounded, was upset that Hyder was harboring opponents of his, including his older brother Mahfuhz Khan, and Raja Saheb, the son of Chanda Saheb, a previous contender for the throne of the Carnatic. Hyder was annoyed that the British had established a fortified outpost at Vellore, and that the company had several times rebuffed his offers of alliance. An offer he made in late 1766 was rejected because the local company council viewed it as incompatible with the treaty signed with the nizam. The First Anglo-Mysore War saw Hyder Ali gain some measures of success against the British, almost capturing Madras. Course