AMENDMENT NO. 4 AND WAIVER
EXHIBIT
10.70
AMENDMENT
NO. 4
AND WAIVER
This Amendment
No. 4 and Waiver (this
"Agreement")
dated
as of January 18, 2008 (the "Effective
Date"),
is by
and among Tekoil
and Gas Gulf Coast, LLC,
a
Delaware limited liability company (the "Company"),
Tekoil
& Gas Corporation,
a
Delaware corporation, as guarantor (the "Guarantor"),
the
lenders party to the Credit Agreement described below ("Lenders"),
X.
Xxxx & Company,
as Lead
Arranger and as Syndication Agent (in such capacities, "Syndication
Agent"),
and
X.
Xxxx & Company,
as
Administrative Agent for such Lenders (together with its permitted successors
in
such capacity, the "Administrative
Agent")
and as
counterparty to the Company under the ISDA Agreement referred to below (in
such
capacity, "Lender
Counterparty").
RECITALS
A. Reference
is made to that certain Credit and Guaranty Agreement dated as of May 11,
2007 among the Company, the Guarantor, the Lenders, the Syndication Agent and
the Administrative Agent (as amended or supplemented to the date hereof, the
"Credit
Agreement").
Reference is further made to that certain ISDA Master Agreement dated as of
May
11, 2007 (as amended, supplemented, or restated to the date hereof, and together
with all confirmations issued thereunder, the "ISDA
Agreement").
B. Subject
to the terms and conditions of this Agreement, the Company, the Guarantor,
the
Lenders, the Syndication Agent, the Administrative Agent and the Lender
Counterparty, as applicable, wish to (i) make certain amendments to the Credit
Agreement as provided herein and (ii) provide a waiver for the Waiver Defaults,
as defined below.
NOW
THEREFORE, in consideration of their mutual undertakings, the Company, the
Guarantor, the Lenders, the Syndication Agent, the Administrative Agent and
the
Lender Counterparty hereby agree as follows:
Section
1. Definitions
and Interpretations.
As used
in this Agreement, each of the terms defined in the opening paragraph and the
Recitals above shall have the meanings assigned to such terms therein. Each
term
defined in the Credit Agreement and used herein without definition shall have
the meaning assigned to such term in the Credit Agreement, unless expressly
provided to the contrary. Article, Section, Schedule, and Exhibit references
are
to this Agreement, unless otherwise specified. Paragraph headings have been
inserted in this Agreement as a matter of convenience for reference only and
it
is agreed that such paragraph headings are not a part of this Agreement and
shall not be used in the interpretation of any provision of this
Agreement.
Section
2. Waiver.
(a) The
Company hereby acknowledges the existence of the following Events of Default
(the "Waiver
Defaults"):
(i)
the Company's failure to comply with the maximum debt to EBITDA ratio set forth
in Section 6.11 of the Credit Agreement as of September 30, 2007, as
demonstrated by the Compliance Certificate delivered by the Company for the
period ending on such date, (ii) the Company's failure to comply with the PDP
Collateral Coverage Ratio set forth in Section 6.12 of the Credit Agreement
as
of September 30, 2007, (iii) the Company's failure to deposit in the Collateral
Account by November 23, 2007, $370,000 or applicable greater amount as required
by Section 8.1(x) of the Credit Agreement, (iv) the Company's failure to deliver
the reports required by Section 5.2(f)(iii) and 5.2(f)(v) for the month of
October within 30 days after the end of such month, (v) the Company's failure
to
deliver by November 1, 2007, the proposed business plan required by Section
5.2(j) of the Credit Agreement to have been delivered by such date, (vi) the
Company's failure to deliver by December 31, 2007, the insurance coverage
report required by Section 5.2(k) of the Credit Agreement to have been
delivered by such date, (vii) the Parent's failure to have received, on or
before November 7, 2007, net cash proceeds from the issuance of debt or sale
of
its Capital Stock in an aggregate amount of not less than $5,000,000 on terms
and conditions satisfactory to the Administrative Agent in all respects as
required by Section 8.1(q) of the Credit Agreement, (viii) the Parent's failure
to pay to Geophysical Pursuit, Inc. the aggregate amount of $983,500.00 when
due
pursuant to two unsecured demand promissory notes (the "GPI
Notes")
dated
July 11, 2007 and December 6, 2007, in the respective amounts of $581,000.00
and
$402,500.00, which failure constitutes an Event of Default pursuant to Section
8.1(h) of the Credit Agreement, and (ix) the existence of the foregoing Events
of Default under the Credit Agreement constitutes an Event of Default under
the
ISDA Agreement.
(b) Subject
to the terms and conditions of this Agreement, the Lenders and the Lender
Counterparty, as applicable, hereby waive the Waiver Defaults. The waiver by
the
Lenders and the Lender Counterparty described in this Section 2 is contingent
upon the satisfaction of the conditions precedent set forth below in this
Agreement and is limited to the Waiver Defaults. Such waiver shall not be
construed to be a consent to or a permanent waiver of any Section covered by
either of the Waiver Defaults or any other terms, provisions, covenants,
warranties or agreements contained in the Credit Agreement, the ISDA Agreement,
or in any of the other Transaction Documents. The Lenders and the Lender
Counterparty reserve the right to exercise any rights and remedies available
to
them in connection with any other present or future defaults with respect to
the
Credit Agreement, the ISDA Agreement, or any other provision of any Transaction
Document. The description herein of the Waiver Defaults is based upon the
information available to the Lenders and the Lender Counterparty on the date
hereof and shall not be deemed to exclude the existence of any other Events
of
Default. The failure of the Lenders or the Lender Counterparty to give notice
to
any Credit Party of any such other Events of Default is not intended to be
nor
shall be a waiver thereof. The Company and the Guarantor hereby agree and
acknowledge that the Lenders and the Lender Counterparty require and will
require strict performance by the Company and the Guarantor of all of their
respective obligations, agreements and covenants contained in the Credit
Agreement, the ISDA Agreement, and the other Transaction Documents, as amended
hereby, and no inaction or action regarding any Event of Default is intended
to
be or shall be a waiver thereof.
(c) Without
limitation of the foregoing, any failure (i) to comply with the maximum debt
to
EBITDA ratio set forth in Section 6.11 of the Credit Agreement (as amended
hereby) or the PDP Collateral Coverage Ratio set forth in Section 6.12 of the
Credit Agreement as of any subsequent measurement date, (ii) to deposit in
the
Collateral Account all amounts required by Section 8.1(x) of the Credit
Agreement by the date set forth in Section 8.1(x) of the Credit Agreement (as
amended hereby), (iii) to deliver the report required by Section 5.2(f)(v)
of
the Credit Agreement for the month of October by the date set forth in Section
8.1(y) of the Credit Agreement, (iv) to deliver the proposed business plan
required by Section 5.2(j) of the Credit Agreement for fiscal year 2008 by
the
date set forth in Section 8.1(y) of the Credit Agreement, (v) of the Parent
to
have received, by the date set forth in Section 8.1(q) of the Credit
Agreement (as amended hereby), net cash proceeds from the issuance of debt
or
sale of its Capital Stock in an aggregate amount of not less than $5,000,000
on
terms and conditions satisfactory to the Administrative Agent in all respects,
or (vi) pursuant to Section 8.1(bb) with respect to the GPI Notes, shall
constitute an Event of Default under the Credit Agreement, and any such Event
of
Default under the Credit Agreement shall constitute an Event of Default under
the ISDA Agreement.
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Section
3. Amendments
to the Credit Agreement.
(a) Section
1.1 of the Credit Agreement is hereby amended by deleting the definition of
"Calculation Quarter" in its entirety and replacing it with the
following:
"Calculation
Month"
means
each calendar month period.
In
addition, each reference in the Credit Agreement to "Calculation Quarter" is
hereby replaced with a reference to "Calculation Month."
(b) Section
1.1 of the Credit Agreement is hereby amended by deleting the definition of
"Interest Period" in its entirety and replacing it with the
following:
"Interest
Period"
means
(a) the one-month period ending on but not including January 26, 2008, and
(b)
each subsequent one-month period from and including one Monthly Payment Date
to
but not including the next Monthly Payment Date.
(c) Section
1.1 of the Credit Agreement is hereby amended by deleting the definition of
"Permitted G&A Expense Amount" in its entirety and replacing it with the
following:
"Permitted
G&A Expense Amount"
means
the amount of $125,000 per calendar month. The parties agree and acknowledge
that such amount comprises the "Service
Fee"
payable
under the Management Services Agreement.
(d) Section
1.1 of the Credit Agreement is hereby amended by deleting the definition of
"Quarterly Payment Date" in its entirety and replacing it with the
following:
"Monthly
Payment Date"
means
the 26th
day of
each calendar month, commencing with January 26, 2008.
In
addition, each reference in the Credit Agreement to "Quarterly Payment Date"
is
hereby replaced with a reference to "Monthly Payment Date."
(e) Section
2.6(c) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(c) Interest
on each Loan shall be due and payable in arrears, and Company shall pay such
interest then accrued and owing, (i) on and to each Monthly Payment Date
applicable to that Loan; (ii) on the date of any prepayment of all or any
portion of such Loan, whether voluntary or mandatory, to the extent accrued
on
the amount being prepaid; and (iii) at maturity, including the July 2007
Uncommitted Loan Maturity Date and the Maturity Date, as
applicable.
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(f) Section
2.11 of the Credit Agreement is hereby deleted in its entirety and replaced
with
the following:
2.11 Payment
of Principal.
On
each
Monthly Payment Date, Company will repay the principal of the Loans, without
premium or penalty, in an amount equal to (i) on each of January 26, 2008,
February 26, 2008, March 26, 2008, April 26, 2008, May 26, 2008, and
June 26, 2008, the greater of (A) $1,000,000 and (B) 100% of ANCF (or such
lesser percentage of ANCF, not to be less than 50%, as may be selected by Agent
in its sole discretion) for the immediately preceding Calculation Month and
(ii)
on each Monthly Payment Date thereafter, the greater of (A) $2,000,000 and
(B)
100% of ANCF (or such lesser percentage of ANCF, not to be less than 50%, as
may
be selected by Agent in its sole discretion) for the immediately preceding
Calculation Month. Such amount shall be applied first
to pay
(or prepay) the principal of Loans other than the July 2007 Uncommitted Loan
and
second
to pay
(or prepay) the principal of the July 2007 Uncommitted Loan.
(g) Section
5.2 of the Credit Agreement is hereby amended by adding the following clause
(p)
in appropriate alphabetical order:
(p) On
or
about each of the first and fifteenth days of each month (or, if such day is
not
a Business Day, on the immediately succeeding Business Day), or as otherwise
requested by the Administrative Agent, an update regarding the status of all
approvals and authorizations from (i) the Texas Railroad Commission and (ii)
the
Texas General Land Office.
(h) Section
6.11 of the Credit Agreement is hereby amended by modifying the table included
in such Section by deleting in its entirety the reference to "12/31/07" from
the
Fiscal Quarter column as well as by deleting in its entirety the corresponding
reference to "2.50 to 1.00" from the Maximum Ratio column to the immediate
right
thereof.
(i) Section
6.11 of the Credit Agreement is hereby further amended by deleting the final
paragraph thereof in its entirety and replacing it with the
following:
Such
ratio with respect to the Fiscal Quarters ending March 31, 2008, June 30, 2008,
and September 30, 2008 shall be calculated using "Annualized
EBITDA".
For
purposes of this Section 6.11, "Annualized
EBITDA"
means
(a) with respect to the Fiscal Quarter ending Xxxxx 00, 0000, XXXXXX for such
Fiscal Quarter multiplied by 4; (b) with respect to the Fiscal Quarter ending
June 30, 2008, EBITDA for the period commencing on January 1, 2008 through
June
30, 2008 multiplied by 2; and (c) with respect to the Fiscal Quarter ending
September 30, 2008, for the period commencing on January 1, 2008 through
September 30, 2008 multiplied by 4/3.
(j) Section
8.1(s) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
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(s) Company
shall fail to, on or before March 8, 2008 (i) furnish title opinions, in form
and substance reasonably satisfactory to Administrative Agent, covering Texas
State Lease MF030085 (State Tract 5-8A), and any lease pooled or unitized
therewith, specifically addressing, without limitation, the interests of
Borrower in and to the following xxxxx and non-producing reserves: Xxxxx Xxxxx
0-0X #00, Xxxxx Xxxxx 5-8A #01, State Tract 5-8 #01(BP01), State Tract 5-8A
#01(BP02), or (ii) comply with all reasonable requirements made by
Administrative Agent pursuant to such title opinions;
(k) Section
8.1(q) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(q) Parent
shall not have received, on or before February 18, 2008, net cash proceeds
from
the issuance of debt or sale of its Capital Stock in an aggregate amount of
not
less than $5,000,000 (in addition to, and exclusive of, amounts received in
connection with the Required Capital Date) on terms and conditions satisfactory
to the Administrative Agent in all respects;
(l) Section
8.1(x) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(x) Company
(i) shall fail to notify Administrative Agent within 1 Business Day after
receiving any notice regarding the filing, or threatened filing, of any
mechanic's and materialman's lien, or similar lien, by X-X Power or (ii) shall
not have deposited in the Collateral Account, within 15 days after Company's
receipt of any such notice, $370,000 or such greater amount as is sufficient
in
accordance with GAAP to adequately reserve for the Liabilities asserted by
X-X
Power to be owed by Company and/or Sellers, such amounts to be held under the
control of Administrative Agent as cash collateral and applied to satisfy such
Liabilities or other obligations approved in writing or required by the Required
Lenders (including without limitation application to the reduction of
outstanding principal, interest and other sums owed by the Company on the Loans,
the other Obligations, or otherwise under the Transaction
Documents).
(m) Section
8.1 of the Credit Agreement is amended by adding the following clause (y) in
appropriate alphabetical order:
(y) (A)
The
report required by Section 5.2(f)(v) of the Credit Agreement for the month
of
October shall not have been delivered, in detail satisfactory to the
Administrative Agent, on or before January 31, 2008, (B) the proposed business
plan required by Section 5.2(j) of the Credit Agreement for fiscal year 2008,
in
form and detail satisfactory to the Administrative Agent, shall not have been
delivered by March 31, 2008, or (C) the insurance coverage report required
by Section 5.2(k) of the Credit Agreement shall not have been delivered, in
form and substance satisfactory to the Administrative Agent, shall not have
been
delivered by January 31, 2008; or
(n) Section
8.1 of the Credit Agreement is amended by adding the following clause (z) in
appropriate alphabetical order:
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(z) (i)
Any
of the following shall not have occurred on or before February 18, 2008: (A)
Company has hired an operations consultant acceptable to Administrative Agent
or
(B) Company has hired a financial consultant acceptable to Administrative Agent,
or (ii) Company shall fail to hire a regulatory matters consultant acceptable
to
Administrative Agent within 15 days of a request by Administrative Agent that
Company hire a regulatory matters consultant; or
(o) Section
8.1 of the Credit Agreement is amended by adding the following clause (aa)
in
appropriate alphabetical order:
(aa) Any
of
the following shall not have occurred on or before April 30, 2008 with respect
to Company's unnamed, unnumbered workover rig barge (the "Barge"):
(A)
Company has documented the Barge with the United States Coast Guard, (B) Company
has delivered a preferred vessel mortgage, or other first priority perfected
security interest acceptable to Administrative Agent, with respect to the Barge,
and (C) Company has delivered such legal opinions as are requested by
Administrative Agent in connection therewith, all acceptable to Administrative
Agent.
(p) Section
8.1 of the Credit Agreement is amended by adding the following clause (bb)
in
appropriate alphabetical order:
(bb) Any
of
the following shall occur with respect to either of the GPI Notes: (A) Parent
fails to settle in full its obligations with respect to the GPI Notes, on terms
acceptable to Administrative Agent, on or before February 29, 2008, (B) any
acceleration of such obligations, or (C) the commencement of any remedies or
filing of any suit by or on behalf of the payee with respect to such
obligations.
Section
4. Amendment
to the Management Services Agreement.
In
connection with, and in consideration of, the foregoing amendments to the Credit
Agreement, Company and Guarantor hereby amend the Management Services Agreement
by deleting the definition of "Service Fee" in its entirety and replacing it
with the following:
"Service
Fee"
means
(a) through and including December 31, 2007, $250,000 for each calendar month
("Subject Month") beginning June 1, 2007; provided that if a "Default" or
"Event of Default" (as those terms are defined in the senior credit facility
of
the Company in effect from time to time) exists or existed in such Subject
Month, then such amount shall be reduced to $125,000 for such Subject Month
and
(b) commencing January 1, 2008 and thereafter, $125,000 for each calendar
month.
Section
5. No
Obligation to Make Payments; Application.
Notwithstanding anything herein to the contrary, Company hereby acknowledges,
confirms and agrees that for so long as any Event of Default or Potential Event
of Default (as such terms are defined in the ISDA Agreement) is outstanding
with
respect to Company, and at all time prior to the Capitalization Date (a) any
obligation Lender Counterparty may have to make any payment under the ISDA
Agreement shall be suspended and (b) any amounts payable by Lender Counterparty
under the ISDA Agreement may be applied to the Obligations at the Administrative
Agent's election, in such order as may be elected by the Administrative Agent
in
its sole discretion.
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Section
6. Representations
and Warranties.
(a) The
Guarantor represents and warrants that (i) after giving effect to this
Agreement, the representations and warranties set forth in the Credit Agreement,
the representations and warranties set forth in the ISDA Agreement, and the
representations and warranties contained in the other Transaction Documents
to
which the Guarantor is a party are true and correct in all material respects
on
and as of the Effective Date as if made on and as of such date; (ii) other
than
the Waiver Defaults, no Default or Event of Default, or Event of Default or
Potential Event of Default (as such terms are defined in the ISDA Agreement)
has
occurred and is continuing; (iii) the execution, delivery and performance of
this Agreement and the other documents, instruments, certificates and agreements
required to be delivered by this Agreement ("Other
Documents")
and to
which the Guarantor is a party are within the corporate power and authority
of
the Guarantor and have been duly authorized by appropriate corporate action
and
proceedings; (iv) this Agreement and the Other Documents to which the Guarantor
is a party constitute legal, valid, and binding obligations of the Guarantor
enforceable in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the rights of creditors generally and general principles of equity;
(v) there are no governmental or other third party consents, licenses and
approvals required in connection with the execution, delivery, performance,
validity and enforceability of this Agreement or any of the Other Documents
to
which the Guarantor is a party; and (vi) the Liens under the Security Documents
are valid and subsisting and secure the Company's and the Guarantor's
obligations under the Credit Agreement, the ISDA Agreement, and the other
Transaction Documents.
(b) The
Company represents and warrants that: (i) after giving effect to this Agreement,
the representations and warranties contained in the Credit Agreement, the
representations and warranties set forth in the ISDA Agreement, and the
representations and warranties contained in the other Transaction Documents
to
which the Company is a party are true and correct in all material respects
on
and as of the Effective Date as if made on and as of such date; (i) other than
the Waiver Defaults, no Default or Event of Default or Event of Default or
Potential Event of Default (as such terms are defined in the ISDA Agreement)
has
occurred and is continuing; (ii) the execution, delivery and performance of
this
Agreement and the Other Documents to which the Company is a party are within
the
limited liability company power and authority of the Company and have been
duly
authorized by appropriate limited liability company action and proceedings;
(iv)
this Agreement and the Other Documents to which the Company is a party
constitute legal, valid, and binding obligations of the Company enforceable
in
accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity; (v) there
are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity
and
enforceability of this Agreement or any of the Other Documents to which the
Company is a party; and (vi) the Liens under the Security Documents are valid
and subsisting and secure Company's obligations under the Credit Agreement,
the
ISDA Agreement, and the other Transaction Documents.
Section
7. Conditions
to Effectiveness.
This
Agreement shall become effective and enforceable against the parties hereto,
the
Credit Agreement and Management Services Agreement shall be amended as provided
herein, upon the occurrence of the following conditions precedent on or before
the Effective Date:
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(a) Agreement.
The
Administrative Agent shall have received multiple original counterparts of
this
Agreement duly and validly executed and delivered by duly authorized officers
of
the Company, the Guarantor, the Administrative Agent, the Lenders, and the
Lender Counterparty;
(b) No
Default; Representations.
Other
than the Waiver Defaults, no Default or Event of Default or Event of Default
or
Potential Event of Default (as such terms are defined in the ISDA Agreement)
shall have occurred and be continuing as of the Effective Date. The
representations and warranties in this Agreement, and in the Credit Agreement
and the ISDA Agreement, shall be true and correct in all material
respects;
(c) Closing
Documents List.
The
Administrative Agent shall have received, and shall be satisfied in its sole
discretion with, the other items listed on the Closing Documents List attached
hereto as Exhibit
A;
and
(d) Fees.
The
Company shall have paid all fees and expenses of the Administrative Agent's
outside legal counsel and other consultants pursuant to all invoices presented
for payment on or prior to the Effective Date.
Section
8. Effect
on Transaction Documents; Acknowledgments.
(a) The
Company and the Guarantor each acknowledges that on the date hereof all
Obligations are payable without defense, offset, counterclaim or
recoupment.
(b) Except
as
set forth in Section 2 above, the Lenders, Lender Counterparty, and
Administrative Agent hereby expressly reserve all of their respective rights,
remedies, and claims under the Credit Agreement, the ISDA Agreement, and the
other Transaction Documents. Nothing in this Agreement shall constitute a waiver
or relinquishment of (i) any Default or Event of Default, or any Event of
Default or Potential Event of Default (as such terms are defined in the ISDA
Agreement), under the Credit Agreement, the ISDA Agreement, or any of the other
Transaction Documents other than as expressly set forth in Section 2 above,
(ii)
any of the agreements, terms or conditions contained in the Credit Agreement,
the ISDA Agreement, or any of the other Transaction Documents, (iii) any rights
or remedies of the Lenders, Lender Counterparty, Administrative Agent, Royalty
Owner, or Warrant Owner with respect to the Credit Agreement, the ISDA
Agreement, and the other Transaction Documents, or (iv) the rights of each
of
the Lenders, the Lender Counterparty, and the Administrative Agent to collect
the full amounts owing to it under the Credit Agreement, the ISDA Agreement,
and
the other Transaction Documents.
(c) The
Company, the Guarantor, the Lenders and Administrative Agent, each hereby
adopts, ratifies, and confirms the Credit Agreement, as amended hereby, and
the
Company, the Guarantor, and the Lender Counterparty each hereby adopts,
ratifies, and confirms the ISDA Agreement, and each of the foregoing parties
acknowledges and agrees that the Credit Agreement, as amended hereby, the ISDA
Agreement and the other Transaction Documents are and remain in full force
and
effect, and the Company and the Guarantor each acknowledges and agrees that
neither its liabilities under the Credit Agreement, the ISDA Agreement, and
the
other Transaction Documents nor the validity, perfection, or priority of any
lien or security interest securing the Obligations are impaired in any respect
by this Agreement.
-8-
(d) From
and
after the Effective Date, all references to the Credit Agreement, the ISDA
Agreement, and the Transaction Documents (including without limitation the
Management Services Agreement) shall mean such Credit Agreement, such ISDA
Agreement, and such Transaction Documents (including without limitation the
Management Services Agreement) as amended by this Agreement.
(e) This
Agreement and each of the Other Documents is a Transaction Document for the
purposes of the provisions of the other Transaction Documents (including without
limitation the Management Services Agreement). Without limiting the foregoing,
any breach of representations, warranties, and covenants under this Agreement
shall be a Default or Event of Default, as applicable, under the Credit
Agreement.
Section
9. Reaffirmation
of the Guaranty.
The
Guarantor hereby ratifies, confirms, and acknowledges that its obligations
under
the Guaranty are in full force and effect and that the Guarantor continues
to
unconditionally and irrevocably guarantee the full and punctual payment, when
due, whether at stated maturity or earlier by acceleration or otherwise, all
of
the Guaranteed Obligations as such Guaranteed Obligations have been increased
and amended by this Agreement. The Guarantor hereby acknowledges that its
execution and delivery of this Agreement does not indicate or establish an
approval or consent requirement by the Guarantor under the Credit Agreement
in
connection with the execution and delivery of amendments to the Credit
Agreement, the Notes, the ISDA Agreement, or any of the other Transaction
Documents.
Section
10. Release
of Claims.
(a) TO
INDUCE ADMINISTRATIVE AGENT, LENDERS, AND LENDER COUNTERPARTY TO AGREE TO THE
TERMS OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY (A) REPRESENTS AND WARRANTS
THAT, AS OF THE DATE OF THIS AGREEMENT, THERE ARE NO CLAIMS OR OFFSETS AGAINST
OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS
OR UNDER THE ISDA AGREEMENT, AND WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS,
DEFENSES, OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE
DATE
OF THIS AGREEMENT, (B) RELEASES AND FOREVER DISCHARGES THE RELEASED PERSONS
(AS
HEREINAFTER DEFINED) FROM ANY AND ALL RELEASED CLAIMS (AS HEREINAFTER DEFINED),
AND (C) COVENANTS NOT TO ASSERT (AND NOT TO ASSIST OR ENABLE ANY OTHER PERSON
TO
ASSERT) ANY RELEASED CLAIM AGAINST ANY RELEASED PERSON. THE CREDIT PARTIES
ACKNOWLEDGE AND AGREE THAT SUCH RELEASE IS A GENERAL RELEASE OF ANY AND ALL
RELEASED CLAIMS THAT CONSTITUTES A FULL AND COMPLETE SATISFACTION FOR ALL OR
ANY
ALLEGED INJURIES OR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE RELEASED
CLAIMS, ALL OF WHICH ARE HEREIN COMPROMISED AND SETTLED.
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(b) As
used
above, "Released Claims" shall mean any and all actions, causes of action,
judgments, executions, suits, debts, claims, demands, controversies,
liabilities, obligations, damages and expenses of any and every character
(whether known or unknown, liquidated or unliquidated, absolute or contingent,
acknowledged or disputed, direct or indirect), at law or in equity, of
whatsoever kind or nature (including claims of usury), whether heretofore or
hereafter accruing, for or because of any matter or things done, omitted or
suffered to be done by any of the Released Persons prior to and including the
date hereof that in any way directly or indirectly arise out of or in any way
are connected to (i) any of the Transaction Documents or the ISDA Agreement
or
any default or event of default thereunder, (ii) any negotiation, discussion,
enforcement action, agreement or failure to agree related to any Transaction
Document, the ISDA Agreement or any default or event of default thereunder,
or
(iii) any action, event, occurrence, or omission otherwise related to the
rights, duties, obligations and relationships among the various Credit Parties,
Administrative Agent, Lenders, and Lender Counterparty; provided, however,
that
“Released Claims” shall not include any outstanding obligations owed as of the
date of this Agreement to Company by Lender Counterparty, or any affiliate
thereof, under the express terms of the ISDA Agreement, and "Released Persons"
shall mean Administrative Agent, Lenders, Royalty Owner, Warrant Owner, and
Lender Counterparty, together with their respective employees, agents,
attorneys, officers, partners, shareholders, accountants, consultants,
directors, and Affiliates, and their respective successors and
assigns.
Section
11. Miscellaneous.
(a) Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original and all of which, taken together, constitute a single instrument.
This
Agreement may be executed by facsimile signature and all such signatures shall
be effective as originals.
(b) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted pursuant to the Credit
Agreement or ISDA Agreement, as applicable.
(c) Invalidity.
In the
event that any one or more of the provisions contained in this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement.
(d) Governing
Law.
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF.
THIS
AGREEMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AGREEMENT, THE NOTES, THE
ISDA AGREEMENT, AND THE OTHER TRANSACTION DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
THERE
ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.
-10-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized, as of the date first above
written.
| COMPANY | ||
| TEKOIL AND GAS GULF COAST, LLC | ||
| By: Tekoil & Gas Corporation, its Managing Member | ||
| By: | /s/ Xxxx Xxxxxxx | |
|
Xxxx Xxxxxxx
|
||
| CEO and Chairman of the Board of Directors | ||
| GUARANTOR | ||
| TEKOIL & GAS CORPORATION | ||
| By: | /s/ Xxxx Xxxxxxx | |
|
Xxxx Xxxxxxx
|
||
| CEO and Chairman of the Board of Directors | ||
|
X.
XXXX & COMPANY,
as
Lead Arranger, Syndication Agent,
Administrative
Agent, Lender Counterparty and a Lender
|
||
