Exhibit 10.7
REAFFIRMATION AND RATIFICATION AGREEMENT
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June 30, 2006
Laurus Master Fund, Ltd.
c/o Laurus Capital Management LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to (a) the Securities Purchase Agreement dated as of
April 28, 2006 (as amended, restated, modified and/or supplemented from time to
time, the "April 2006 SPA") by and between Gulf Coast Oil Corporation, a
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Delaware corporation (the "Company"), and Laurus Master Fund, Ltd. ("Laurus"),
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(b) the Amended and Restated Secured Term Note effective as of April 28, 2006
made by the Company in favor of Laurus in the aggregate principal amount of
Forty Million Dollars ($40,000,000) (as amended, restated, modified and/or
supplemented from time to time, the "April 2006 Term Note"), (c) the Subsidiary
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Guaranty dated as of April 28, 2006 (as amended, restated, modified and/or
supplemented from time to time, the "Guaranty") made by the Company in favor of
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Laurus, (d) the Master Security Agreement dated as of April 28, 2006 (as
amended, restated, modified and/or supplemented from time to time, the "Master
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Security Agreement") by and between the Company and Laurus and (e) the Related
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Agreements (as defined in the April 2006 SPA) (as amended, restated, modified
and/or supplemented from time to time, the "April 2006 Related Agreements") (the
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April 2006 SPA, the April 2006 Term Note, the Guaranty, the Master Security
Agreement and the April 2006 Related Agreements, each an "April 2006 Agreement"
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and collectively the "April 2006 Agreements").
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To induce Laurus to enter into the Securities Purchase Agreement dated as
of the date hereof by and between the Company and Laurus (as amended, restated,
modified and/or supplemented from time to time, the "June 2006 SPA") and
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purchase from the Company a Secured Term Note in the aggregate principal amount
of Five Million Dollars ($5,000,000) (as amended, restated, modified and/or
supplemented from time to time, the "June 2006 Term Note"), the undersigned
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hereby:
(1) represents and warrants to Laurus that it has reviewed and approved the
terms and provisions of the June 2006 SPA and the Related Agreements (as defined
in the June 2006 SPA, the "June 2006 Related Agreements") (the June 2006 SPA,
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the June 2006 Term Note and the June 2006 Related Agreements, each an "June 2006
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Agreement" and collectively, the "June 2006 Agreements");
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(2) acknowledges, ratifies and confirms that all of the terms, conditions,
representations and covenants contained in the April 2006 Agreements to which it
is a party are in full force and effect and shall remain in full force and
effect after giving effect to the execution and effectiveness of the June 2006
Agreements;
(3) acknowledges, ratifies and confirms that the defined term "Obligations"
under the Guaranty and the Master Security Agreement includes, without
limitation, all obligations and liabilities of the Company to Laurus under the
June 2006 Agreements and all other obligations and liabilities of the
undersigned to Laurus (including interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, whether or not a claim for post-filing or post-petition
interest is allowed or allowable in such proceeding), whether now existing or
hereafter arising, direct or indirect, liquidated or unliquidated, absolute or
contingent (collectively, the "Obligations");
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(4) acknowledges and confirms that the occurrence of an Event of Default
under any of the April 2006 Agreements shall constitute an Event of Default
under the June 2006 Agreements and (ii) the occurrence of an Event of Default
under any of the June 2006 Agreements shall constitute an Event of Default under
the April 2006 Agreements;
(5) represents and warrants that no offsets, counterclaims or defenses
exist as of the date hereof with respect to any of the undersigned's obligations
under any of the April 2006 Agreements;
(6) acknowledges, ratifies and confirms (i) the grant by each undersigned
to Laurus of a security interest and lien in the assets of each undersigned as
more specifically set forth in the April 2006 Agreements (the "Security Interest
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Grants") and (ii) that the Security Interest Grants secure all Obligations;
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(7) notwithstanding anything contained in any June 2006 Agreement to the
contrary, on July 5, 2006, Gulf Coast shall make a mandatory prepayment of the
outstanding balance of the June 2006 Term Note in an amount equal to
$224,440.14, and until the date of payment, Gulf Coast shall hold such proceeds
in trust for Laurus. Such prepayment shall be applied to the outstanding balance
of the June 2006 Term Note in such order as Laurus shall elect; and
(8) releases, remises, acquits and forever discharges Laurus and Laurus'
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the "Released Parties"), from any and all actions
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and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, for or because of any matter or things done, omitted or suffered to be
done by any of the Released Parties prior to and including the date of execution
hereof, and in any way directly or indirectly arising out of or in any way
connected to this Reaffirmation and Ratification Agreement, the April 2006
Agreements and the June 2006 Agreements and any other document, instrument or
agreement made by any of the undersigned in favor of Laurus.
Laurus hereby confirms that the outstanding principal balance of the April
2006 Term Note as of the date hereof is $39,164,144.
[Remainder of Page Intentionally Left Blank]
This agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
GULF COAST OIL CORPORATION
By: /s/ Xxxxxx X. XxXxxxxxx
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Name: Xxxxxx X. XxXxxxxxx
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Title: President & CEO
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Address: 0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
ACCEPTED AND AGREED TO:
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxxx Grin
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Name: Xxxxxx Grin
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Title: Director
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