Letter Agreement
Letter
Agreement
Date: July 3,
2007
| To: |
Amegy
Bank National Association ("Amegy")
|
|
0000
Xxxx Xxx Xxxxxxx
XX
Xxx 00000
Xxxxxxx,
Xxxxx 00000-0000
|
|
Tekoil
and Gas Gulf Coast ("Tekoil")
00000
X-00 Xxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, Xxxxx 00000
|
| From: |
X.
Xxxx & Company,
|
|
as
Administrative Agent (the "Administrative
Agent")
00
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
|
Re:
|
Assignment
of Deposit Account dated July 3, 2007, between Amegy and Tekoil (the
"Assignment
Agreement")
|
Gentlemen:
Reference
is made to (i) the above-described Assignment Agreement, the defined terms
of which are used herein unless otherwise defined herein, (ii) the Application
and Agreement for Irrevocable Standby Letter of Credit of even date herewith
made by Tekoil and accepted by Amegy (the "LC
Agreement"),
and
(iii) the Credit Agreement dated as of May 11, 2007, among Tekoil, as
borrower, Tekoil & Gas Corporation, as guarantor, the lenders parties
thereto (the "Lenders"), and the Administrative Agent (as modified, the
"Credit
Agreement").
The
Lenders have agreed to make an additional loan to Tekoil under the Credit
Agreement to enable Tekoil to fund the Account as required by Amegy for the
issuance of the Irrevocable Documentary Blanket Letter of Credit No. ___ dated
July ___, 2007 (the "Letter
of Credit").
Pursuant to the Assignment Agreement, Amegy retains possession and control
of
the Account and the other Collateral for so long as obligations remain
outstanding with respect to the Letter of Credit. In connection with the
foregoing and to induce the Lenders to make an additional loan to Tekoil for
the
funding of the Account, and for good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, Amegy, Tekoil and the
Administrative Agent agree as follows:
(i) Any
funds
returned or released by Amegy from the Account or otherwise with respect to
the
Collateral for any reason, whether due to reduction or expiration of the Letter
of Credit or otherwise (other than for reimbursement of Amegy for any draws
under the Letter of Credit or payment of usual and customary fees with respect
thereto) shall be paid directly to the Administrative Agent.
(ii) In
connection with the Credit Agreement, the parties hereto entered into a Blocked
Deposit Account Control Agreement and a Default Deposit Account Control
Agreement, both dated as of May 11, 2007 (collectively, the "Account
Control Agreements").
Amegy
agrees and acknowledges that with respect to any conflict or inconsistency
between the terms of the Assignment Agreement, the LC Agreement, the Letter
of
Credit, or any other agreement, on the one hand, and the terms of the Account
Control Agreements, on the other, the terms of the Account Control Agreements
shall govern. Without limiting the foregoing, Amegy agrees and acknowledges
that, as provided in the Account Control Agreements (A) any security interest
it
may obtain in the respective Deposit Accounts described therein (including
pursuant to the LC Agreement) shall be subordinate to the security interest
of
the Administrative Agent and (B) money and other items credited to such Deposit
Accounts will not be subject to deduction, set-off, banker's lien, or other
right in favor of any person other than the Administrative Agent except as
otherwise specifically provided in the Account Agreements.
(iii) None
of
the Assignment Agreement, the LC Agreement, nor the Letter of Credit may be
amended or otherwise modified without the prior written consent of the
Administrative Agent.
-2-
If
the
foregoing accurately reflects your understanding and agreement regarding the
foregoing, please sign in the space below and return one original of this
letter, fully executed, to the undersigned.
|
X. XXXX & COMPANY, as Lead Arranger,
Syndication Agent, Administrative Agent and a
Lender
|
|||
| By: | |||
| Name: | |||
| Title: | |||
AGREED
and ACCEPTED as of the 29th
of
June,
2007:
AMEGY
BANK NATIONAL ASSOCIATION
| By: | |||
| Name: | |||
| Title: |
TEKOIL
AND GAS GULF COAST, LLC
By:
Tekoil & Gas Corporation,
its
Managing Member
| By: | /s/ Xxxxxx Xxxxxxx | ||
| Name: | Xxxxxx Xxxxxxx | ||
| Title: | Chief Financial Officer |
Signature
Page to Letter Agreement
