EXHIBIT 10.5
COMPROMISE AND SETTLEMENT AGREEMENT
THIS COMPROMISE AND SETTLEMENT AGREEMENT (this "Agreement") is
entered into effective as of May 7, 1996, by and among Saratoga Resources, Inc.,
a Texas corporation ("Saratoga Texas"), Saratoga Resources, Inc., a Delaware
corporation ("Saratoga Delaware"), Lobo Operating Inc., a Texas corporation
("LOI"), Lobo Energy Inc., a Texas corporation ("LEI"), (Saratoga Texas,
Saratoga Delaware, LOI and LEI sometimes collectively referred to herein as the
"Saratoga Companies"), Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Dryer,
(the "Shareholders"; the Saratoga Companies and the Shareholders sometimes
collectively referred to herein as the "Saratoga Parties") and Internationale
Nederlanden (U.S.) Capital Corporation, a Delaware corporation ("ING");
WITNESSETH:
A. Saratoga Texas, Saratoga Delaware, LEI and ING are parties
to that certain Credit Agreement dated as of March 30, 1995 (as heretofore
amended or modified, the "Credit Agreement"), pursuant to which ING extended
credit to Saratoga Texas in accordance with the terms therein. As of the date
hereof the sum of $13,765,721.23 principal plus accrued unpaid interest is owed
under the Credit Agreement.
B. The Shareholders are directors and principal shareholders
of Saratoga Delaware.
C. All obligations under the Credit Agreement and the Loan
Documents (the "Secured Obligations") are secured by perfected, first priority
liens on and security interests in the real and personal property of the
Saratoga Companies (collectively the "Collateral"). The Saratoga Companies are
in default under the Credit Agreement. All of the Secured Obligations are past
due and are due and payable in full.
D. Pursuant to the terms and provisions of the Deed of Trust,
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing Statement
(the "Deed of Trust") dated March 30, 1995, by Saratoga Texas, which secures the
Secured Obligations, the Substitute Trustee appointed under the Deed of Trust
has given Notice of Substitute Trustee Sale of the property encumbered by such
Deed of Trust (the "Foreclosure Properties") to take place at or within three
(3) hours after 10:00 o'clock a.m., local time, on Tuesday, May 7, 1996 (the
"Foreclosure Sale"), as more particularly described in such notice, which
notice, has been posted at the appropriate location at the courthouses located
in the counties in Texas in which the properties covered by the Deed of Trust
are located.
E. The Saratoga Companies have alleged certain claims and
causes of action against ING and Internationale Nederlanden (U.S.) Securities
Corporation in that certain action (the "Action") No. C96-399-D3 in the District
Court of Xxxx County, Texas, 341st Judicial District (the "Asserted Claims").
ING denies any liability for the Asserted Claims.
F. The Saratoga Companies have failed to pay when due various
obligations and liabilities to others. As a result, mechanic's and materialmen's
liens and mineral contractors' liens have been filed against property of
Saratoga Texas and suits for collection of debts have been filed against the
Saratoga Companies.
G. Contemporaneously with this Agreement, PrimeEnergy
Corporation, a Delaware corporation ("PrimeEnergy") and ING have entered into
that certain Purchase and Sale Agreement dated of even date herewith (the
"Purchase Agreement") pursuant to which, if ING is the high bidder at the
Foreclosure Sale and acquires the Foreclosure Property, PrimeEnergy has agreed
to purchase, and ING has agreed to sell, the Foreclosure Properties and certain
other properties as more particularly described on Exhibit A to the Assignment,
Conveyance and Xxxx of Sale attached hereto as Exhibit I (the "Interests"). The
Purchase Agreement contemplates and is conditioned upon this Agreement and the
purchase of the Foreclosure Properties by ING at the Foreclosure Sale.
H. A true and correct copy of the Purchase Agreement is
attached hereto. The consideration payable by PrimeEnergy under the Purchase
Agreement is as follows ("Sale Proceeds"):
(i) the payment of the aggregate sum of $7,180,000
subject to adjustment resulting from the allocation
of revenues and expenses as a result of the
operations, based upon the effective date of the
purchase and sale, for purposes of such adjustment,
on January 1, 1996; and
(ii) the Conveyance of a Production Payment and Net
Profits Overriding Royalty Interests (the "NPI") out
of the Interests, as provided for in the Purchase
Agreement; and
I. In the absence of a compromise and settlement of the
Secured Obligations and of the Asserted Claims, the Saratoga Companies would
likely have pursued the Asserted Claims and been the subject of a voluntary or
involuntary case under the United States Bankruptcy Code, and the parties have
voluntarily entered into this Agreement to buy peace.
J. The Saratoga Parties and ING desire to enter into this
Agreement to (i) compromise and settle the Asserted Claims, (ii) to permit the
sale of the Foreclosure Properties pursuant to the Notice, (iii) to provide for
certain payments by ING after the sale and (iv) to release the Saratoga Parties
from liability for the Secured Obligations, liens and security interests
provided herein and (v) to provide further assurances to PrimeEnergy regarding
the assets to be sold pursuant to the Purchase Agreement and to provide for an
allocation of revenues and expenses attributable to the Interests based on a
January 1, 1996 effective date.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the parties hereby contract, covenant and agree as follows:
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1. DEFINITIONS. As used in this Agreement, in addition to the
terms defined elsewhere in this Agreement, and the following terms shall have
the meanings specified below:
"EXCLUDED ASSETS" means the Assets described in the Partial
Release attached as Exhibit II.
"LOAN DOCUMENTS" means the Credit Agreement, the Deed of Trust
and all guaranties, deeds of trust, mortgages, assignments, security agreements,
pledges, financing statements and other agreement documents or instruments
guaranteeing, securing or benefiting the Secured Obligation.
"PERSON" means an individual, corporation, partnership,
limited liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or joint
venture, court or governmental unit or any agency or subdivision thereof, or any
other legally recognizable entity.
"SALE DOCUMENTS" means the documents and instruments attached
as Exhibits I, II, III, IV, V, VI and VIII.
"TRANSACTION DOCUMENTS" means this Agreement, the Mutual
Release, the Sale Documents, the Disbursement Agreement, and the documents and
instruments to be delivered pursuant hereto.
2. ACKNOWLEDGMENTS AND AGREEMENTS BY THE SARATOGA PARTIES. The
Saratoga Parties hereby acknowledge, covenant and agree that:
(a) The Foreclosure Properties under the Deed of Trust are
subject to a valid, perfected, first priority lien and security interest in
favor of ING.
(b) The Saratoga Parties shall permit the Foreclosure Sale
without any adverse interference or disruption, and shall not take any action,
whether before, during or after the Foreclosure Sale, including filing,
commencing, or prosecuting any suits, action, lawsuit, litigation, proceeding or
motion for temporary restraining order with regard to the Foreclosure Sale in
any action, litigation or otherwise, or otherwise seeking to rescind the
Foreclosure Sale, have the Foreclosure Sale declared void or set aside, or
questioning the validity of the Foreclosure Sale or any subsequent sale of the
Interests by ING.
(c) The Saratoga Parties will properly (and promptly after
requested) execute and deliver to ING, or to Prime Energy, as the buyer of the
Foreclosure Property from ING to the extent requested by ING, the Sale Documents
and all documents, conveyances, deeds, assignments, transfers, bills of sale and
letters in lieu necessary to fully transfer title and deliver possession of the
Interests and divest the Saratoga Parties of any right, title or interest in and
to the Interests. The Saratoga Parties will convey to ING or to PrimeEnergy, to
the extent requested by ING, all of the other assets owned by the Saratoga
Companies on the date hereof excluding the Excluded Assets. The Saratoga Parties
shall not take any action at any time in contravention of the Sale Documents,
including, without limitation, the filing, presentation or commencement of
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any suit, action, proceeding or lawsuit or litigation requesting a declaration,
finding or order rescinding the Sale Documents, declaring the Sale Documents
void, setting aside the Sale Documents or otherwise questioning the validity of
or seeking any redress with respect to the Sale Documents.
(d) The Saratoga Parties agree that (i) the execution and
delivery of the documents by Saratoga as provided under this Section 2, (ii) the
execution and delivery of the Disbursement Agreement, (iii) the execution and
delivery of the Mutual Release and (iv) the payment under section 4(a) shall
take place simultaneously and are conditioned upon each other.
(e) The Saratoga Parties will immediately cause the Action and
all their claims against ING and Internationale Nederlanden (U.S.) Securities
Corporation (collectively, the "ING Parties") to be dismissed with prejudice.
(f) The ING Parties have entered into the Transaction
Documents in order to avoid the inconvenience and expense of litigation and have
not admitted any liability in respect to the Alleged Claims or any other
liability of any kind or character.
(g) No Saratoga Party or ING shall take any action in
contravention of the terms of the Disbursement Agreement or which otherwise
might affect the actions of the Trustee under the Disbursement Agreement in
carrying out the provisions of the Disbursement Agreement. Without limiting the
generality of the foregoing, no Saratoga Party shall (i) acquire, enter into any
agreement regarding, or advise or consult with a holder thereof regarding any
Liability (as referred to below) or any claim which is in any manner derivative
of or related to any Liability, or (ii) for a period of 180 days after the date
of this Agreement have any communication with any holder of any Liability or any
claim which is derivative of or related to a Liability except communication
permitted under the terms of the Disbursement Agreement.
3. ACKNOWLEDGMENTS AND AGREEMENTS BY ING. ING hereby
acknowledges and agrees that:
(a) ING shall apply the Sale Proceeds in accordance with
Section 4 of this Agreement. ING hereby releases any and all right, title,
interest and claim it may have in respect of (i) the cash to be released to the
Saratoga Parties under Section 4(a) and (ii) all of the Excluded Assets.
ING will execute a release of its liens and security in the Excluded Assets.
(b) The Saratoga Parties have entered into the Settlement
Documents in order to avoid the inconvenience and expense of litigation.
(c) ING agrees to bid at least $9,200,000 of the Secured
Obligations to acquire the Foreclosure Properties at the Foreclosure Sale. If
ING's bid is exceeded by a higher cash bid, ING will apply the proceeds as
provided in Section 4. If ING acquires the Foreclosure Properties at the
Foreclosure Sale, ING agrees to consummate the sale to PrimeEnergy under the
Purchase Agreement.
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4. APPLICATION OF CASH PROCEEDS RECEIVED BY ING. Upon receipt
by ING of the Cash Proceeds in immediately available funds (or if another party
acquires the Foreclosure Property at the Foreclosure Sale, upon receipt of the
cash proceeds in immediately available funds):
(a) ING shall pay to the Saratoga Parties $1,500,000 pursuant
to a certain Escrow Agreement in the form attached hereto as Exhibit III.
(b) ING agrees to fund amounts from time to time to the
Trustee under the Disbursement Agreement up to the Schedule 1 Amount and the
Schedule 2 Amount as provided in the Disbursement Agreement executed by ING
contemporaneously with this Agreement, a copy of which is attached hereto as
Exhibit A (the "Disbursement Agreement"). The amounts so funded are remitted to
the Trustee, subject to the terms of the Disbursement Agreement, to settle and
finally satisfy the specific outstanding obligations of the Saratoga Parties
described on Schedules 1 and 2 to the Disbursement Agreement (the
"Liabilities"). The remaining amounts of the Disbursement Accounts will be
retained by ING free of the obligations under the Disbursement Agreement at the
time and in the amount provided in the Disbursement Agreement.
(c) ING shall retain the balance which exceeds the amounts in
Sections 4(a) and 4(b).
(d) None of the Saratoga Companies shall be liable for the
repayment of any of the Secured Obligations remaining after the Foreclosure Sale
and after the transfers under Section 2, other than out of or from liens on and
security interests in any other remaining, non-released assets and property
owned by the Saratoga Companies as of the date hereof; provided, however, that
nothing herein shall prejudice the right of ING to recover any damages or costs
(including reasonable attorney's fees) incurred by ING or PrimeEnergy, or an
express third party beneficiary of this Agreement, as a result of the breach of
any representation, warranty or covenant contained in this Agreement, the Sale
Documents or any other Transaction Document.
(e) The Saratoga Parties agree that (i) the execution and
delivery of the documents by Saratoga as provided under Section 2, (ii) the
execution and delivery of the Disbursement Agreement, (iii) the execution and
delivery of the Mutual Release and (iv) the payment under paragraph 4(a) shall
take place simultaneously and are conditioned upon each other.
5. NPI. As part of the consideration being paid by PrimeEnergy
for the Interests, PrimeEnergy is conveying the NPI to ING. The Saratoga Parties
hereby release any and all right, title, interest and claim they may have to the
NPI.
6. MUTUAL RELEASES. The Saratoga Parties and ING hereby agree,
as an essential consideration for the transactions contemplated by the
Settlement Documents, to enter into the Mutual Release in the form of Exhibit B
attached hereto (the "Mutual Release").
7. REPRESENTATION AND WARRANTIES BY THE SARATOGA PARTIES. Each
of the Saratoga Parties hereby represents and warrants with respect to itself to
ING that:
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(a) Each Saratoga Company is duly organized, validly existing
and in good standing under the laws of its state of organization, having all
corporate powers required to carry on its business and enter into and carry out
the transactions contemplated hereby. Each Saratoga Company has taken all
corporate action necessary to authorize the execution and delivery by it of the
Transaction Documents to which it is a party and to authorize the consummation
of the transactions contemplated thereby and the performance of its obligations
thereunder.
(b) The execution and delivery by each of the Saratoga Parties
of the Transaction Documents to which it is a party, the performance of its
obligations under such Transaction Documents, and the consummation of the
transactions contemplated by the various Transaction Documents, do not and will
not (i) conflict with any provision of (1) any domestic law, statute, rule or
regulation, (2) the articles or certificate of incorporation, bylaws, or
charter, of any Saratoga Company, or (3) to the best of its knowledge, any
agreement, judgment, license, order or permit applicable to or binding upon any
Saratoga Party, or (ii) result in any lien upon any assets or properties of any
Saratoga Party except as expressly contemplated in the Transaction Documents.
Except as expressly contemplated in the Transaction Documents no consent,
approval, authorization or order of, and no notice to or filing with, any court
or governmental authority or third party is required in connection with the
execution, delivery or performance by any Saratoga Party of any Transaction
Document or to consummate any transactions contemplated by the Transaction
Documents.
(c) This Agreement is, and the other Transaction Documents
when duly executed and delivered will be, legal, valid and binding obligations
of each Saratoga Party which is a party thereto, enforceable in accordance with
their terms except as such enforcement may be limited by bankruptcy, insolvency
or similar laws of general application relating to the enforcement of creditors'
rights.
(d) None of the Saratoga Companies owns any interest in any
Person other than Saratoga Delaware's interests in Saratoga Texas, LEI and LOI
and Saratoga Texas' 65% general partner interest in Xxxxxxxx Partnership 90-I.
The only asset owned by the Xxxxxxxx Partnership 90-I is an interest in the
Xxxxxxxx Field. Each Shareholder, as to himself alone, represents that no
payment or transfer of assets of any kind or type has been made since May 1,
1995 by any of the Saratoga Companies to or for the benefit of such Shareholder
or any Insider with respect to that Shareholder, as that term is used in the
United States Bankruptcy Code, except salaries and reimbursement of expenses to
officers, directors and employees of the Saratoga Companies consistent with the
salaries and the policies on expense reimbursement in effect immediately prior
to May 1, 1995.
(e) The Saratoga Companies have made a full, complete and
accurate disclosure to ING and PrimeEnergy of, and have transferred to ING, or
to PrimeEnergy by virtue or through the documents attached hereto, all cash,
cash equivalents, undeposited checks or negotiable instruments, prepaid
expenses, deposits, refunds or assets readily convertible to cash now owned by
any of the Saratoga Companies (the "Closing Date Cash"). There are no assets of
any Saratoga Company not otherwise disclosed to ING and PrimeEnergy. Any Closing
Date Cash which may
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hereafter come into the possession of any Saratoga Company shall be immediately
transferred to ING or to PrimeEnergy, pursuant to the amounts attached hereto.
(f) None of the Shareholders have any interest in PrimeEnergy
or in any affiliate of PrimeEnergy or otherwise has received, or has any
expectation to receive, any personal benefit from the Purchase Agreement or the
transactions contemplated by the Purchase Agreement other than from pursuant to
this Agreement and their respective interests as Shareholders of Saratoga
Delaware.
(g) The Reconciliation Statement regarding deposits and other
accounts and outstanding checks, wire transfers and other debits and credits is
true, accurate and complete in all respects.
(h) The Foreclosure Sale has not and is not enjoined or
restrained and will not be enjoined or restrained by any of the Saratoga Parties
by any order, decree, judgment or other ruling of any court and is not otherwise
barred or stayed by any proceeding of any type and none of the Saratoga Parties
will commence any action, proceeding, lawsuit or litigation seeking such an
order or proceeding.
8. REPRESENTATION AND WARRANTIES BY ING. ING hereby represents
and warrants to the Saratoga Parties that
(a) ING is duly organized, validly existing and in good
standing under the laws of its state of organization, having all corporate
powers to enter into and carry out the transactions contemplated hereby. ING has
taken all corporate action necessary to authorize the execution and delivery by
it of the Transaction Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the performance of its
obligations thereunder.
(b) This Agreement is, and the other Transaction Documents to
which it is a party, when duly executed and delivered will be, legal, valid and
binding obligations of ING, enforceable in accordance with their terms except as
such enforcement may be limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights.
9. MODIFICATION; SEVERABILITY. This Agreement may be amended
or modified only in writing signed by each Saratoga Party and ING. If any
provision of this Agreement shall for any reason be held to violate applicable
law, and so much of said Agreement is or is deemed to be unenforceable, then the
invalidity of such specific provision herein shall not be held to invalidate any
other provision herein, and all such other provisions shall remain force and
effect.
10. CONFIDENTIALITY.
(a) Each party hereto acknowledges that the terms of the
Transaction Documents are confidential and non-public in nature. Each party
hereto will keep in confidence all terms herein or in any other Transaction
Document and will not permit any other Person to make any
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copy, photocopy or photograph here from or to write down or record any
information with respect hereto. Notwithstanding the foregoing, each party
hereto may disclose any such information (i) to its attorneys and accountants
who would ordinarily have access to such information in the normal course of
performance of their duties, in confidence in accordance with such Party's
normal customary practices, (ii) to another party hereto, (iii) Xxxxxxxx
Xxxxxxx, counsel to certain working interest owners or (iv) subject to paragraph
(b), to such third parties to comply with a mandatory and valid requirement of
(A) any law, ordinance, or regulatory authority, (B) any order, decree,
judgment, subpoena, notice of discovery or similar request or testimony, or
pleading issued, filed, served or purposed on its face to be issued, filed or
served (x) by or under authority of any court, tribunal, arbitration board or
similar entity or (y) in connection with any proceedings, case or matter
tribunal, arbitration board, or any governmental agency, commission, authority,
board or similar entity.
(b) If any Party determines that any disclosure is or may be
required under clause (iii) of the preceding paragraph (a), the disclosing party
shall give notice of the proposed disclosure to the other parties to this
Agreement, and shall, to the extent it may be done without violation of law,
rule, regulation or court order, contest the disclosure, and shall in any event,
limit the nature and extent of disclosure to such disclosure that such Party is
advised by its counsel is minimally necessary to so comply.
(c) No Party will disparage the creditworthiness of any other
Party to this Agreement from and after this date.
(d) In the event that ING has heretofore filed a report or
reports with any Credit Reporting agency concerning the Saratoga Parties, ING
will file a follow-up report with such agency or agencies indicating that the
Saratoga Companies have discharged the indebtedness due ING, and are now in good
standing.
(e) No Saratoga Party will issue any press release or other
public announcement regarding the transactions contemplated by the Transaction
Documents until the recording of the Trustee's Deeds and the conveyances
contemplated by this Agreement in each applicable county.
11. ARBITRATION.
(a) As used in this section:
(i) "AAA" means the American Arbitration
Association (or any successor thereto),
(ii) "Claims" means all claims by either
party hereto against the other with respect to (A)
the Transaction Documents (including among others any
claims with respect to the interpretation or validity
of any of the Transaction Documents, the existence or
scope of any duties owed thereunder, whether or not
any such duties have been performed or breached in
any circumstances, or the extent or enforcement of
any property rights created thereunder or subject
thereto; (B) any claim, whether in tort, for breach
of
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contract, for breach of implied duties, under any
statute or otherwise arising at law or in equity,
which is related in any manner to the subject matter
of the Transaction Documents, and
(iii) "Disputed Matters" means all Claims,
all defenses against any Claims, and all
controversies relating thereto.
(b) If either one or more of the Saratoga Parties
(the "Claiming Saratoga Party") or ING ever desires to assert a Claim against
the other, the party asserting such Claim will give written notice thereof to
the other party. During the thirty day period following receipt of such notice
by the other party, both parties will discuss such Claim and the validity
thereof. If the parties hereto cannot come to agreement about such Claim by the
end of such thirty day period (as such period may be extended by mutual
agreement), then within fifteen days after the end of such period either party
may by written notice to the other invoke the arbitration provisions of this
Agreement, whereupon the Claiming Saratoga Party and ING shall submit such Claim
and all Disputed Matters in any way related thereto to arbitration under the
procedures in the next following subsection (c).
(c) All Disputed Matters shall be resolved by
arbitration conducted by three arbitrators in accordance with this Section 6.9
and, to the extent not in conflict herewith, the Commercial Arbitration Rules of
the AAA then in effect. Each such arbitrator must be independent and impartial.
Within ten days after the sending and receipt of a notice invoking arbitration
as provided in subsection (b) above, each of the Saratoga Claiming Party and ING
shall specify (by notice to the other) the name and address of an arbitrator
appointed by it. At the end of such ten days, if one party has made a
specification of its appointed arbitrator but has not received notice of a
similar specification by the other party, then the party which has made a
specification shall give notice to the other party that it has not received a
specification from the other party. If the other party does not act to specify
its arbitrator within an additional seven days after the giving of such notice,
the party who has made its specification may appoint the second arbitrator in
place of the party who has failed to do so. Within fifteen days after the first
two arbitrators have been appointed, they shall select the third arbitrator. If
a third arbitrator has not been selected within such period, either party hereto
may petition the Administrative Judge presiding over the Xxxxx Xxxxxxxx Xxxxxx
xx Xxxxxx Xxxxxx, Xxxxx to appoint such third arbitrator, whereupon such judge
(or any person designated by such judge to make such appointment) may make such
appointment unless the first two arbitrators have come to agreement on the third
arbitrator. Consistent with the expedited nature of arbitration, each party
will, upon the written request of the other party, provide the other with copies
of documents relevant to the issues raised by the Disputed Matter. Other
discovery may be ordered by the arbitrators to the extent they deem relevant and
appropriate, and any dispute regarding discovery, including disputes as to the
need thereof or the relevance or scope thereof, shall be determined by the
arbitrators, whose determination shall be conclusive. The Saratoga Claiming
Party and ING shall proceed expeditiously with any such arbitration and shall
conclude all proceedings thereunder, including any hearing, in order to allow a
decision based on applicable law to be rendered within ninety days after the
appointment of the third arbitrator. The decision of any two such arbitrators on
the issues before them shall be final, and any award or order so decided may be
enforced in any court
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having personal jurisdiction over the party against whom enforcement is sought.
Each Party shall bear its own expenses, including attorneys' fees and expenses
of arbitration, in connection with any such arbitration. Although the foregoing
arbitrations shall be conducted under the rules of the AAA, the AAA itself shall
not conduct such arbitrations, nor shall such arbitrations be considered under
the auspices of the AAA, nor shall any fee be due the AAA. The arbitrators shall
honor the election by the Saratoga Claiming Party and ING of the laws of the
State of Texas as set out in the various Transaction Documents, provided that
each arbitration proceeding shall also be subject to the United States
Arbitration Act, 9 U.S.C., Chapter 1, xx.xx. 1 et seq, to the extent applicable.
The arbitrators are not empowered to award punitive or exemplary damages on any
Claim and EACH SARATOGA CLAIMING PARTY AND ING HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO RECOVER PUNITIVE OR EXEMPLARY DAMAGES ON ANY CLAIM.
(d) All applicable statutes of limitations and
defenses based on the passage of time shall be tolled during the period in which
arbitration has been invoked as set forth in this section (but not during any
period prior to such invocation of arbitration). Each Saratoga Claiming Party
and ING is required to continue to perform its obligations under the Transaction
Documents pending final resolution of any Disputed Matter.
12. NOTICES. All requests or other communications required or
permitted to be given pursuant to this Agreement shall be deemed sufficiently
given when telefaxed and confirmed or delivered personally during regular
business hours and before 5:00 p.m. during a business day to the appropriate
location described below, or three (3) days after posting thereof by United
States first-class, registered or certified mail, return receipt requested, with
postage and fees prepaid and addressed as follows:
If to PrimeEnergy: 0 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Phone No. (000) 000-0000
Fax No. (000) 000-0000
If to Saratoga 0000 Xxxxx Xxxxxxx, Xxxxx 000
Companies: Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Chairman
Phone No. 713/000-0000
Fax No. 713/000-0000
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If to ING: Internationale Nederlanden (U.S.)
Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Phone No. 212/000-0000
Fax No. 212/000-0000
Any party hereto may designate a different address for
subsequent notices or communications at any time by furnishing written notice to
the other parties hereto in the manner described above.
13. ATTORNEYS' FEES. If any legal action, arbitration
proceeding, or other action or proceeding is brought for the enforcement of this
Agreement, or because of any alleged dispute, breach, or default in connection
with any of the provisions of this Agreement, the successful or prevailing party
hereto (whether or not such prevailing party is the defendant in such action or
proceeding) shall be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding in addition to any other remedies to
which he or it may be entitled under this Agreement, at law or equity. The
rights and remedies granted herein are cumulative and not exclusive of any other
right or remedy granted herein or provided in equity or by law.
14. ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE OTHER
TRANSACTION DOCUMENTS, COLLECTIVELY SET FORTH THE ENTIRE AGREEMENT AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF. NO OTHER
REPRESENTATIONS HAVE BEEN MADE OR RELIED UPON BY ANY OF THE PARTIES HERETO IN
CONNECTION WITH THE MATTERS SET FORTH HEREIN. EACH PARTY HERETO ACKNOWLEDGES
THAT (I) ALL REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS THAT IT HAS
RELIED UPON OR WILL RELY UPON IN ENTERING INTO THIS AGREEMENT ARE CONTAINED IN
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AND (II) IT IS NOT RELYING
UPON ANY OTHER REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, PROMISE OR
INDUCEMENT WHATSOEVER. THERE ARE NO ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES
HERETO.
15. GOVERNING LAW; JURISDICTION. The laws of the United States
and the internal laws of the State of Texas shall govern this Agreement and the
performance of the transactions by the Parties hereto.
16. HEADINGS; COUNTERPARTS. Headings in this Agreement are for
convenience only and shall not affect the interpretation hereof. This Agreement
may be executed in multiple counterparts, each of which shall have the force and
effect of an original, and all of which together shall constitute one and the
same agreement.
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IN WITNESS WHEREOF, this Agreement has been executed as of the
date first written above.
SARATOGA RESOURCES, INC.,
a Texas corporation
By: _______________________
Xxxxxx X. Xxxxx
Chairman and Chief
Operating Officer
SARATOGA RESOURCES, INC.,
a Delaware corporation
By: _______________________
Xxxxxx X. Xxxxx
Chairman and Chief
Executive Officer
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORP.
By: _______________________
Xxxxx X. Xxxxxxx
Vice President
LOBO OPERATING, INC.
By: _______________________
Xxxxxx X. Xxxxx
Chairman and Chief
Operating Officer
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LOBO ENERGY, INC.
By: _______________________
Xxxxxx X. Xxxxx
Chairman and Chief
Operating Officer
_______________________
XXXXXX X. XXXXX
_______________________
XXXXXX X. XXXXXXXX
_______________________
XXXXXXX X. DRYER
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SCHEDULE OF EXHIBITS
Exhibit I Assignment, Conveyance and Xxxx of Sale by Saratoga Texas, LOI
and LEI
Exhibit II Partial Release by ING
Exhibit III Escrow Agreement
Exhibit IV Assignment and Xxxx of Sale by Saratoga Delaware
Exhibit V Resignation, Assignment, Xxxx of Sale and Agreement by
Saratoga Texas, LOI and LEI
Exhibit VI Agreement by Saratoga Delaware
Exhibit VII Agreement regarding Interests by Saratoga Texas, Saratoga
Delaware, LOI, LEI
Exhibit VIII Assignment of Bank Accounts and Agreement by Saratoga
Delaware, Saratoga Texas, LOI and LEI
Exhibit A Disbursement Agreement
Exhibit B Mutual Release
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