FEBRUARY 2008 AMENDMENT AGREEMENT
Exhibit
99.21
FEBRUARY
2008 AMENDMENT AGREEMENT
THIS
FEBRUARY 2008 AMENDMENT AGREEMENT (this “Amendment”)
is
made as of February 14, 2008, by and between SONTERRA RESOURCES, INC., a
Delaware corporation (f/k/a River Capital Group, Inc., Ballistic Ventures,
Inc.,
a xxXXxxx.xxx, Inc., Greystone Credit Inc. and Permastoprust International,
Inc.), with principal offices located at 0 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx
Xxxxxxx, XX00 prior to the Exchange Closing (as defined in the Exchange
Agreement) and to be located at 000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxx,
00000 as of and after the Exchange Closing (“RCGI”),
and
THE LONGVIEW FUND, L.P., a California limited partnership with its principal
offices located at 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000
and other offices in Connecticut and New York (“Longview”).
Capitalized terms not otherwise defined herein shall have the meanings given
to
them in the Exchange Agreement (as defined below).
WHEREAS:
A.
RCGI
and
Longview entered into that certain Securities Exchange and Additional Purchase
Agreement, dated as of August 3, 2007 (as amended, the “Exchange
Agreement”).
B. Contemporaneously
with the execution and delivery of the Exchange Agreement, Longview purchased
the
Sonterra Equity Note from Sonterra Oil
&
Gas, Inc., a Delaware Corporation (f/k/a Sonterra Resources, Inc.)
(“Sonterra”).
C. At
the
Flash Acquisition Closing, Longview purchased the Sonterra Non-Equity Note
from
Sonterra.
D. The
Exchange Agreement provides that, at the Exchange Closing (which is to occur
on
the date hereof) among other things Longview will exchange with RCGI (i) the
Sonterra Equity Note and the New Sonterra Common Shares for the New RCGI Common
Shares, and (ii) the Sonterra Non-Equity Note for the Initial RCGI Note in
an
initial principal amount equal to the outstanding principal amount of the
Sonterra Non-Equity Note.
E. The
Exchange Agreement further provides that, at the Exchange Closing, RCGI shall
pay to Longview the Exchange Settlement Amount, which equals the sum of (I)
Longview’s legal, due diligence and other expenses incurred in connection with
the Exchange Closing and all other expenses relating to negotiating and
preparing the Transaction Documents and consummating the transactions
contemplated thereby, plus (II) all interest under the Sonterra Equity Note
and
under the Sonterra Non-Equity Note that was accrued and unpaid immediately
prior
to the Exchange Closing.
F. In
light
of the accrued and unpaid interest owing under the Sonterra Equity Note and
under the Sonterra Non-Equity Note, RCGI and Longview hereby deem it advisable
and in the best interests of the undersigned to amend the Exchange Agreement
and
the terms of the Initial RCGI Note as provided herein.
NOW,
THEREFORE, in consideration of the agreements, provisions and covenants
contained herein and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, each of the undersigned agrees
as
follows:
1. Amendment
of the Initial RCGI Note To Include Interest Since January 3.
a. Each
of
RCGI and Longview acknowledges and agrees that the Interest (as defined in
the
Sonterra Non-Equity Note) that is accrued and unpaid immediately prior to the
date hereof (i.e., Interest accrued from and including January 3, 2008 through
and including February 14, 2008) is $30,466.62.
b. RCGI
and
Longview agree that the Initial RCGI Note shall be in the form of the Initial
RCGI Note attached as Exhibit A to the Exchange Agreement, except that Sections
2(n) and 2(o) of the Initial RCGI Note shall state in their entirety as follows
(i.e., Sections 2(n) and 2(o) of the form of Initial RCGI Note attached as
Exhibit A to the Employment Agreement are hereby amended and restated to read
in
their entirety as follows):
|
(o)
|
“Interest
Amount”
means as of any date, with respect to any Principal, all accrued
and
unpaid Interest (including any Interest at the Default Rate) on such
Principal through and including such date; provided,
however, that,
“Interest Amount” shall mean, as of any date from and including the
Issuance Date until the entire Additional Interest Amount has been
paid in
full pursuant to this Note, with respect to any Principal, the sum
of (i)
all accrued and unpaid Interest (including any Interest at the Default
Rate) on such Principal through and including such date plus (ii)
any
portion of the Additional Interest Amount that has not been paid
to the
Holder pursuant to this Note; and for purposes of this definition
“Additional
Interest Amount”
means $30,466.62.
|
|
(p)
|
“Interest
Payment Date”
means the first Business Day of each calendar quarter, beginning
with the
calendar quarter that commences on April 1, 2008, through and including
the last calendar quarter that commences prior to the Maturity
Date.
|
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2. Amendment
of the Exchange Agreement - Exchange of Accrued Interest on Sonterra Equity
Note.
a. Each
of
RCGI and Longview acknowledges and agrees that (i) as of February 13, 2008,
the
principal owing under the Sonterra Equity Note is $5,990,010, and (ii) the
Interest (as defined in the Sonterra Equity Note) that is accrued and unpaid
immediately prior to the date hereof (i.e., Interest accrued from and including
January 3, 2008 through and including February 14, 2008) is
$91,247.68.
b. RCGI
and
Longview agree to amend, and hereby amend and restate in its entirety Section
1(a)(i) of the Exchange Agreement, effective immediately prior to the Exchange
Closing, as follows:
Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6(a)
and
7(a) below, on the Exchange Closing Date, (A) RCGI shall issue to Buyer, and
Buyer agrees to acquire from RCGI, the New RCGI Common Shares in exchange for
Buyer’s assignment to RCGI of the Sonterra Equity Note (including all principal
thereof and accrued and unpaid interest thereon) and the New Sonterra Common
Shares (i.e., so that after such transactions, RCGI holds all of the New
Sonterra Common Shares and the Sonterra Equity Note and Buyer holds the New
RCGI
Common Shares), (B) RCGI shall issue to Buyer, and Buyer agrees to acquire
from
RCGI, the RCGI Warrant in exchange for Buyer’s assignment to RCGI of the
Sonterra Warrant (i.e., so that after such transactions, RCGI holds the Sonterra
Warrant and Buyer holds the RCGI Warrant), (C) RCGI shall issue to Buyer, and
Buyer agrees to acquire from RCGI, the Initial RCGI Note in exchange for Buyer’s
assignment to RCGI of the Sonterra Non-Equity Note (i.e., so that after such
exchange RCGI holds the Sonterra Non-Equity Note and Buyer holds the Initial
RCGI Note), and (D) RCGI shall pay to Buyer an amount (the “Exchange
Settlement Amount”)
equal
to all fees and other amounts to be paid to Buyer as set forth in Section 4(i).
The completion of the exchanges provided for in this Section 1(a) shall effect
the cancellation of the Sonterra Equity Note (including the termination of
any
obligations with respect to payment of any accrued and unpaid interest thereon),
the Sonterra Warrants and the Sonterra Non-Equity Note (including the
termination of any obligations with respect to payment of any accrued and unpaid
interest thereon), and RCGI shall stamp “CANCELLED” on each of the foregoing and
return each to Sonterra.
c. As
amended hereby, the Exchange Agreement remains in full force and
effect.
3. Obligations
to Directors and Others.
Amounts
owing as of the Exchange Closing Date (as defined in the Exchange Agreement)
to
directors and former directors of RCGI or their affiliated entities, for
services provided by them prior to the Exchange Closing, shall be paid to them
by RCGI following the receipt by RCGI of the proceeds of any equity or debt
financing consummated by RCGI, its affiliates or subsidiaries, after the
Exchange Closing, and shall be paid within 2 business days of such receipt.
In
no event shall such payments be made later than 60 days following the Exchange
Closing Date.
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4. Avoidance
of Doubt.
The
undersigned hereby agree, for the avoidance of doubt, that (a) this Amendment
shall be a Transaction Document, (b) any references to the Exchange Agreement
in
any of the Transaction Documents shall mean the Exchange Agreement, as, and
to
the extent, amended by this Amendment, and (c) any references to the Initial
RCGI Note in any of the Transaction Documents shall mean the Initial RCGI Note,
in a form reflecting the terms of this Amendment.
5. Reservation
of Rights.
RCGI
acknowledges and agrees that the execution and delivery of this Amendment by
Longview (a) shall not waive any breach, default, or event of default by them,
respectively, that may be continuing under any of the Transaction Documents
or
any other documents, (b) shall not waive any of Longview’s rights or remedies
arising from any such breach, default or event of default or otherwise available
under any Transaction Document or at law, and Longview expressly reserves all
such rights and remedies, and (c) shall not constitute a course of conduct
or
dealing among any of the undersigned.
6. Successors
and Assigns.
This
Amendment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The successors
and
assigns of such entities shall include their respective receivers, trustees
or
debtors-in-possession.
7. Further
Assurances.
RCGI
and Longview each hereby agrees from time to time, as and when requested by
Longview, to execute and deliver or cause to be executed and delivered, all
such
documents, instruments and agreements, including secretary’s certificates, stock
powers and irrevocable transfer agent instructions, and to take or cause to
be
taken such further or other action, as Longview may reasonably deem necessary
or
desirable in order to carry out the intent and purposes of this Amendment,
the
Exchange Agreement (as amended hereby) and any other Transaction
Documents.
8. Rules
of Construction.
All
words in the singular or plural include the singular and plural and pronouns
stated in either the masculine, the feminine or neuter gender shall include
the
masculine, feminine and neuter, and the use of the word “including” in this
Amendment shall be by way of example rather than limitation.
9. Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof by registered or certified mail, return receipt
requested, or by deposit with a nationally recognized overnight delivery
service, to such party at the address for such notices to it under this
Amendment and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AMENDMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
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10. Counterparts.
This
Amendment may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party.
In
the
event that any signature to this Amendment or any amendment hereto is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof. No party hereto shall raise the use of a facsimile machine or e-mail
delivery of a “.pdf” format data file to deliver a signature to this Amendment
or any amendment hereto or the fact that such signature was transmitted or
communicated through the use of a facsimile machine or e-mail delivery of a
“.pdf” format data file as a defense to the formation or enforceability of a
contract, and each party hereto forever waives any such defense.
11. Section
Headings.
The
section headings herein are for convenience of reference only, and shall not
affect in any way the interpretation of any of the provisions
hereof.
12. No
Strict Construction.
The
language used in this Amendment will be deemed to be the language chosen by
the
parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party.
13. Merger.
This
Amendment, the Exchange Agreement (as amended hereby) and the other Transaction
Documents represent the final agreement of each of the parties hereto with
respect to the matters contained herein and may not be contradicted by evidence
of prior or contemporaneous agreements, or prior or subsequent oral agreements,
among any of the parties hereto. This Amendment may not be amended, supplemented
or otherwise modified except in a writing executed by each of the
undersigned.
14. Exchange
Closing Contingency.
Notwithstanding anything to the contrary herein, if the Exchange Closing and
the
all of the transactions contemplated by the Exchange Agreement to occur in
connection therewith do not occur on February 14, 2008, then this Amendment,
and
any and all sections hereof, shall be deemed ineffective and void ab initio
and
the actions, transactions and amendments to other documents pursuant hereto
shall be deemed never to have occurred.
[Remainder
of page intentionally left blank; Signature page follows]
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IN
WITNESS WHEREOF, this Amendment has been duly executed and delivered by each
of
the undersigned as of the date first above written.
| SONTERRA RESOURCES, INC., a Delaware corporation | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxx | |
| Name: |
Xxxxxx Xxxxxx |
|
| Title: | Chief Executive Officer | |
| THE LONGVIEW FUND, L.P., a California limited partnership | ||
|
By:
Viking Asset Management, LLC
Its:
Investment Adviser
|
| By: | /s/ S. Xxxxxxx Xxxxxxx | |
| Name: |
S. Xxxxxxx Xxxxxxx |
|
| Title: | Chief Financial Officer |
[Signature
Page to the February 2008 Amendment Agreement]
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