THIS LOAN AGREEMENT is dated 24 October 2007 BY AND BETWEEN:
Exhibit
10.59
THIS
LOAN AGREEMENT
is dated
24 October 2007
BY
AND
BETWEEN:
|
(1)
|
Tri
Star Capital Ventures Limited,
a
limited liability company organised and registered under the laws
of the
British Virgin Islands with its registered office at ▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Cay 1, P.O. Box 362, Road Town, Tortola, British
Virgin
Islands (the “Lender”);
and
|
|
(2)
|
Tekoil
& Gas Corporation,
a
company organised and incorporated under the laws of the State
of
Delaware, with its registered office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇
▇▇▇, The ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the “Borrower”).
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IT
IS AGREED
as
follows:
|
1.
|
DEFINITIONS
AND CONSTRUCTION
|
| (a) |
In
this Agreement, the following terms have the following
meanings:
|
Business
Day
means
any day other than a Saturday, a Sunday, or a day on which banking institutions
are generally closed for business in the British Virgin Islands, Austria,
or the
United States of America.
Deed
of Guarantee
shall
mean those certain deeds of guarantee to be executed
and delivered by each of the Guarantors to the Lender pursuant to Clause
4
hereof.
Disbursement
Date
means
the date on which the Lender advances any principal amount of the Loan to
the
Borrower in accordance with Clause 5 (Disbursement).
Event
of Default
means
any of the events specified in Clause 12 (Events of Default).
Existing
Liens
means
the Liens currently existing in favour of ▇. ▇▇▇▇ & Company and its
affiliates (and their successors and assigns) on the Borrower’s interests in,
and rights with respect to, Tekoil and Gas Gulf Coast, LLC (including all
proceeds, products, accessions and profits of or in respect
thereof).
Guarantors
means
each of (1) ▇▇▇▇ ▇▇▇▇▇▇▇, director, born 13 October 1962 in Great Yarmouth,
England, UK and residing at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
(2)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, director, born 29 March 1948 in New York, USA and residing
at ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇, (3) ▇▇▇▇▇ Clear, director, born 15
November 1954 in Port ▇▇▇▇▇▇▇▇▇, South Africa and residing at ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and (4) ▇▇▇▇▇▇▇ Creitzman,
director, born London and residing at ▇▇▇▇ ▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇
▇▇▇.
Indebtedness
means
any indebtedness for or in respect of moneys borrowed; any amount raised
by
acceptance under any acceptance credit facility; any amount raised pursuant
to
any note purchase facility or the issue of bonds, notes, debentures, loan
stock
or any similar instrument; any amount raised pursuant to any issue of shares
which are expressed to be redeemable (other than solely at option of Borrower);
any amount raised under any other transaction (including any forward sale
or
purchase agreement) having the commercial effect of a borrowing; and the
amount
of any liability in respect of any guarantee or indemnity for any of the
items
referred to above.
Instalment
shall
have the meaning ascribed thereto in Clause 5 (Disbursement).
Interest
Payment Date
shall
have the meaning ascribed thereto in Clause 8 (Interest).
Lien
means
any mortgage, pledge, lien, charge, encumbrance, assignment, hypothecation
or
security interest or any other agreement or arrangement having a similar
effect.
Loan
shall
have the meaning ascribed thereto in Clause 2 (Loan).
Final
Repayment Date
means 15
April 2009 or such other date as may be expressly agreed by the Lender and
the
Borrower in writing.
Repayment
Date
means,
with respect to any principal amount of the Loan, the date on which such
principal amount is repaid to the Lender in accordance with this
Agreement.
Tax
means
any tax, levy, impost, duty or other charge or withholding of a similar nature
from a payment under this Agreement.
United
States dollars
or
US$
means
the lawful currency for the time being of the United States of
America.
| (b) |
In
this Agreement, unless the contrary intention appears, a reference
to:
|
| (i) |
a
person
includes any individual, company, unincorporated association or
body of
persons (including a partnership, joint venture or consortium),
government, state, agency, international organisation or other
entity;
|
| (ii) |
a
provision of law is a reference to that provision as amended or
re-enacted;
|
| (iii) |
a
Clause or a Schedule is a reference to a clause of or a schedule
to this
Agreement; and
|
| (iv) |
a
person includes its successors and
assigns.
|
| (c) |
The
index to and the headings in this Agreement are for convenience
only and
are to be ignored in construing this
Agreement.
|
|
2.
|
LOAN
|
The
Lender shall make available to the Borrower, and the Borrower shall borrow
from
the Lender, a Loan in an aggregate principal amount equal to US$8,500,000.00
(Eight Million Five Hundred Thousand United States dollars) (the “Loan”)
on the
terms and subject to the conditions of this Agreement.
|
3.
|
PURPOSE
OF LOAN
|
The
Loan
shall be used solely to make an equity contribution of at least $7,500,000
to
Tekoil and Gas Gulf Coast, LLC, a subsidiary of the Borrower, and to pay
certain
costs and expenses of Tekoil and Gas Gulf Coast, LLC, a Delaware limited
liability company which is majority owned by Borrower.
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4.
|
PRECONDITIONS
TO DISBURSING THE LOAN
|
The
obligations of the Lender to disburse the Loan are conditional upon each
of the
following having been delivered to and received by the Lender in form and
substance satisfactory to the Lender acting at its sole discretion:
| (a) |
duly
certified copies of the constitutive documents of the Borrower,
including
without limitation a certificate of incorporation, a certificate
of good
standing and an incumbency
certificate;
|
| (b) |
a
duly certified copy of a resolution of the authorised governing
body of
the Borrower:
|
| (1) |
approving
the terms of, and the transactions contemplated by, this
Agreement;
|
2
| (2) |
authorising
specified persons to execute this Agreement on its behalf;
and
|
| (3) |
authorising
specified persons to sign and/or despatch all documents and notices
to be
signed and/or despatched by it under or in connection with this
Agreement;
|
| (c) |
evidence
that the process agent, which the Borrower and each of the Guarantors
must
appoint for the purposes of this Agreement or the respective Deed
of
Guarantee, has accepted its
appointment;
|
| (d) |
a
legal opinion from counsel to the Borrower and each of the Guarantors
in a
form reasonably acceptable to the Lender covering such matters
as are
customary in financing transactions;
|
| (e) |
each
of the Guarantors having executed and delivered to the Lender a
deed of
guarantee substantially in the form set forth in Schedule 1 hereto
pursuant whereto each of the Guarantors guarantees any and all
of the
obligations of the Borrower under this Agreement;
|
| (f) |
the
audited consolidated financial statements of the Borrower for the
year
ended 31st December 2006 prepared in accordance with International
Accounting Standards or U.S. Generally Accepted Accounting Principles;
and
|
| (g) |
the
unaudited consolidated financial statements of the Borrower for
the
6-month period ended 30 June 2007 prepared in accordance with
International Accounting Standards or U.S. Generally Accepted Accounting
Principles.
|
|
5.
|
DISBURSEMENT
|
| (a) |
The
Lender will disburse the Loan within 2 (two) Business Days following
the
receipt of a drawdown notice in the form set forth in Schedule
2, provided
that (1) the condition set forth in Clause 4 shall have been satisfied
and
(2) there are no Events of Default then
outstanding.
|
| (b) |
The
Lender will make the Loan available by credit of the Borrower’s account
set forth in Clause 16 of this Agreement.
|
|
6.
|
REPAYMENT
|
The
Borrower shall repay the outstanding principal amount of the Loan in equal
monthly instalments of US$708,333 (Seven Hundred and Eight Thousand Three
Hundred and Thirty Three United States dollars) commencing on 1st
May 2008
and shall repay the outstanding balance of the Loan not theretofore repaid,
together with all accrued interest thereon calculated in accordance with
Clause
8 and all other amounts owed by the Borrower to the Lender in accordance
with
this Agreement, in full on the Final Repayment Date.
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7.
|
PREPAYMENT
|
| (a) |
The
Borrower may, by giving not less than thirty (30) calendar days'
prior
written irrevocable notice to the Lender, prepay the Loan in whole
or in
part.
|
| (b) |
Any
prepayment of part of the Loan must be in a minimum principal amount
and
an integral multiple in principal amount of US$100,000 (One Hundred
Thousand United States dollars), and such prepayment must be accompanied
by all accrued but unpaid interest.
|
|
8.
|
INTEREST
|
| (a) |
The
outstanding principal amount of the Loan will accrue interest at
the rate
of 13% (thirteen percent) per annum (net of any withholding) for
the
period commencing on the respective Disbursement Date and ending
on the
respective Repayment Date.
|
3
| (b) |
All
interest will accrue on a daily basis and will be calculated for
the exact
number of days elapsed (including the respective Disbursement Date
and the
respective Repayment Date) on the basis of a year of 360
days.
|
| (c) |
The
Borrower shall pay interest on the outstanding principal amount
of the
Loan on the first (1st) day of each calendar month (each, an “Interest
Payment Date”),
provided that (1) if an Interest Payment Date falls on a day that
is not a
Business Day, interest shall be due on the next succeeding Business
Day
and (2) in the event any outstanding principal amount of the Loan
is being
repaid (whether at stated maturity, early repayment or upon prepayment)
interest accrued from the last Interest Payment Date prior to the
respective Repayment Date of such outstanding principal amount
of the Loan
until such respective Repayment Date shall be paid together with
the
repayment of such principal amount of the Loan on such respective
Repayment Date.
|
| (d) |
Any
amount of Interest not paid on an Interest Payment Date shall be
compounded and added to the outstanding principal amount of the
Loan.
|
|
9.
|
PAYMENTS
AND TAXES
|
| (a) |
All
payments by the Borrower are to be made in United States dollars
in
immediately available funds to the Lender at its account set forth
in
Clause 15 (or such other account as the Lender may notify the Borrower
from time to time) free and clear of and without deduction, set-off
or
withholding for or on behalf of Taxes or any other amounts or claims,
including counterclaims. If the Borrower is compelled to make any
deduction, set-off or withholding for any reason, the Borrower
will pay
such additional amounts as shall ensure receipt by the Lender of
the full
amount that the Lender would have received but for the deduction,
set-off
or withholding.
|
| (b) |
If
the Borrower, in its sole discretion, determines it is required
by law to
deduct any U.S. federal withholding taxes from or in respect of
any sum
payable hereunder to any Lender: (i) the Borrower will make such
deductions, (ii) the Borrower will pay the full amount deducted
to the
relevant taxation authority or other authority in accordance with
applicable law on the Lender’s behalf, and (iii) the Borrower shall
deliver to such Lender evidence of such payment.
|
| (c) |
In
the event withholding taxes (e.g., pursuant to section 871(a) or
section
881(a) of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”))
are directly remitted on behalf of the Lender solely because (i)
the
Lender fails to provide the appropriate documentation (described
in Clause
13.(b) below) in order to take advantage of an otherwise available
withholding tax exemption, or (ii) the Lender breaches any of the
Lender
Representations (described in Clause 13.(a) below), the Borrower
shall
nevertheless have an obligation to increase the amount of any payment
made
to the Lender to account for the payment of such tax, or to otherwise
indemnify any Lender, in respect of any United States federal withholding
taxes remitted on the Lender’s behalf. In such case, however, Lender will
reasonably cooperate with Borrower in effecting a release and return
of
any such withheld amount from applicable authorities and remittance
of
same to Borrower.
|
| (d) |
If
the Repayment Date is not a Business Day, the Repayment Date will
be
extended to the next succeeding Business Day. During any extension
of the
Repayment Date interest shall continue to accrue on the Loan for
the
period of such extension.
|
| (e) |
In
the event the Borrower fails to pay in full the amount due on a
particular
date (including principal, interest and any other amount), then
the amount
received by the Lender shall be allocated as
follows:
|
| (i) |
first,
to payment of any amount other than principal and interest, which
are owed
to the Lender by the Borrower;
|
| (ii) |
second,
to payment of any amount of
interest;
|
4
|
(iii)
|
third,
to payment of any principal amount due;
and
|
| (iv) |
fourth,
to payment of any other principal
amount.
|
| (f) |
Any
amounts owed by the Borrower under this Agreement shall be considered
paid
on the value date on which the respective amount is credited to
the
account of the Lender as confirmed by an extract from the Lender’s
account.
|
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10.
|
BORROWER'S
REPRESENTATIONS
AND WARRANTIES
|
The
Borrower represents and warrants on the date of this Agreement and on each
Disbursement Date that:
|
(a)
|
it
is a legal entity duly and validly incorporated and existing in
good
standing under the laws of the State of
Delaware;
|
|
(b)
|
it
has the legal capacity and power to enter into, execute, deliver
this
Agreement and to perform its obligations
hereunder;
|
|
(c)
|
this
Agreement has been duly and validly executed by
it;
|
|
(d)
|
the
execution, delivery and performance by it of this Agreement do
not violate
or conflict with any law applicable to it, any order or judgment
of any
court or other agency of government applicable to it or any of
its assets
or any contractual restriction binding on or affecting it or any
of its
assets;
|
|
(e)
|
its
obligations under this Agreement constitute its legal, valid and
binding
obligations, enforceable in accordance with its terms (subject
to
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability,
to
equitable principles of general
application);
|
|
(f)
|
it
has obtained all authorisations, consents, licenses and permits
required
in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by this Agreement
and
all such authorisations, consents, licenses and permits are in
full force
and effect;
|
|
(g)
|
no
Event of Default is outstanding;
|
|
(h)
|
no
litigation, arbitration or administrative proceedings are current,
pending
or threatened against the Borrower or its assets except as disclosed
in
the filings Borrower has made with the U.S. Securities and Exchange
Commission (the “Filings”);
|
|
(i)
|
all
information (the Information)
supplied by or on behalf of the Borrower to the Lender prior to
the
execution of this Agreement was true, complete and accurate in
all
respects at its date and did not omit any information which, if
disclosed,
might adversely affect the Lender's decision to enter into this
Agreement.
Nothing has occurred since the date of the Information which renders
it
untrue or misleading in any
respect;
|
|
(j)
|
its
payment obligations under this Agreement rank at least pari
passu
with all its other present and future unsecured payment obligations,
except for obligations mandatorily preferred by law applying to
companies
generally;
|
|
(k)
|
all
amounts payable by it under this Agreement may be made without
any
deduction or withholding for or on account of Tax from a payment
under
this Agreement;
|
|
(l)
|
the
execution by it of this Agreement constitutes, and the exercise
by it of
its rights and performance of its obligations under this Agreement
will
constitute, private and commercial acts performed for private and
commercial purposes and it will not be entitled to claim immunity
from
suit, execution, attachment or other legal process in any proceedings
taken in its jurisdiction of incorporation in relation to this
Agreement;
|
5
|
(m)
|
it
is not necessary under the laws of its jurisdiction of incorporation
in
order to enable the Lender to enforce its rights under this Agreement
or
by reason of the execution of this Agreement or the performance
by it of
its obligations under this Agreement that the Lender should be
licensed,
qualified or otherwise entitled to carry on business in the Borrower's
jurisdiction of incorporation and the Lender is not and will not
be deemed
to be resident, domiciled or carrying on business in the Borrower's
jurisdiction of incorporation by reason only of the execution,
performance
and/or enforcement of this Agreement;
and
|
|
(n)
|
its
irrevocable submission under this Agreement to arbitration and/or
the
jurisdiction of the courts of England, agreement that this Agreement
is
governed by English law and its agreement not to claim any immunity
to
which it or its assets may be entitled are legal, valid and binding
under
the laws of its jurisdiction of incorporation and any judgment
obtained in
England will be recognised and be enforceable by the courts of
its
jurisdiction of incorporation.
|
|
11.
|
BORROWER’S
COVENANTS
|
The
Borrower undertakes, so long as any amount remains owing to the Lender under
this Agreement, as follows:
|
(a)
|
to
provide to the Lender promptly when they become available with
a copy of
the annual audited consolidated financial statements of the Borrower
and
the quarterly and semi-annual unaudited consolidated financial
statements
of the Borrower, in each case prepared in accordance with International
Accounting Standards or U.S. Generally Accepted Accounting
Principles;
|
|
(b)
|
to
provide to the Lender promptly such additional financial and other
information, which is in the possession of the Borrower, as the
Lender may
request at its discretion from time to
time;
|
|
(c)
|
to
notify the Lender promptly of any adverse change in its financial
situation;
|
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(d)
|
to
provide to the Lender promptly upon becoming aware of them, details
of any
litigation, arbitration or administrative proceedings that are
current,
threatened or pending against or involving the Borrower;
|
|
(e)
|
to
promptly obtain, maintain and comply with the terms of any authorisation,
consent, license or permit required under any law, rule or regulation
to
enable it to enter into and perform its obligations under this
Agreement
or for the legality, validity, enforceability or admissibility
in evidence
in any relevant jurisdiction of this
Agreement;
|
|
(f)
|
to
comply in all respect with all laws, rules and regulations to which
it is
subject;
|
|
(g)
|
to
ensure that their payment obligations under this Agreement rank
at least
pari
passu with
all their other present and future unsecured payment obligations,
except
for obligations mandatorily preferred by law applying to companies
generally;
|
|
(h)
|
not
to, directly or indirectly, create, incur or suffer to exist any
Liens
(other than (i) a Lien in favour of the Lender, (ii) the Existing
Liens,
or (iii) a Lien over the assets covered by the Existing Liens to
secure
Indebtedness raised to replace the Indebtedness secured by the
Existing
Liens) on the assets of the Borrower to secure any Indebtedness
of the
Borrower or any of its
subsidiaries;
|
6
|
(i)
|
not
to enter into any accession, amalgamation, demerger, division,
merger,
reconstruction or separation without the prior written consent
of the
Lender;
|
|
(j)
|
to
pay or discharge in a timely manner, and in any event before the
same
shall become overdue, all of its liabilities with respect to
Taxes;
|
|
(k)
|
not
to pay, make or declare any dividend or other distribution without
the
prior written consent of the Lender; and
|
|
(l)
|
not
to, directly or indirectly, transact any business or enter into
any
transaction with any related parties, including inter-company loans,
other
than on arm’s length terms.
|
|
12.
|
EVENTS
OF DEFAULT
|
| (a) |
If:
|
| (i) |
the
Borrower fails to pay any amount within three (3) Business Days
after the
amount becomes due in the currency and in the manner specified
under this
Agreement;
|
| (ii) |
the
Borrower fails to perform or comply in any material respect with
any of
its other obligations or with any other provision of this Agreement
within
thirty (30) Business Days;
|
| (iii) |
any
representation or warranty of the Borrower in or in connection
with this
Agreement proves to have been inaccurate, incomplete or misleading
in any
material respect at the time it was made or repeated or deemed
to have
been made or repeated; or
|
| (iv) |
any
other Indebtedness or any other financial obligation of the Borrower
becomes prematurely payable or is placed on demand or the creditor
in
respect thereof becomes entitled to declare any such obligation
prematurely payable or any such obligation is not paid when due
or any
security therefor becomes enforceable;
or
|
| (v) |
the
Borrower goes into liquidation or is dissolved, or a meeting of
the
members or creditors of the Borrower is convened for the purpose
of
considering a resolution for (or to petition for) its winding up
or for
its administration or any such resolution is passed;
or
|
| (vi) |
any
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager,
receiver, administrative receiver, administrator or other creditors'
representative is appointed (or is requested to be appointed) in
respect
of the Borrower or any of its assets;
or
|
| (vii) |
the
Borrower is, or is deemed for the purposes of any law to be, unable
to pay
its debts as they fall due or to be insolvent or ceases or threatens
to
cease to carry on all or a substantial part of its business;
or
|
| (viii) |
any
attachment, sequestration, distress or execution affects any asset
of the
Borrower and is not discharged within forty-five (45) Business
Days;
or
|
| (ix) |
any
step (including, without limitation, petition, proposal, convening
a
meeting, negotiations or suspension of payments on any debt) is
taken with
a view to a composition, assignment or arrangement with any creditors
of
the Borrower or with a view to the rehabilitation, administration,
custodianship, liquidation, winding-up or dissolution of the Borrower
or
any other insolvency proceedings involving the Borrower or an order
for
the winding-up or administration of the Borrower is made;
or
|
7
| (x) |
any
event analogous (in the opinion of the Lender) to those described
in
sub-clauses (v) to (ix) (inclusive) above occurs in any jurisdiction;
or
|
| (xi) |
it
is or becomes illegal for the Lender or the Borrower to make or
maintain
any of its obligations under this Agreement;
or
|
| (xii) |
any
of the Guarantors breaches any of its obligations under its respective
Deed of Guarantee; or
|
| (xiii) |
this
Agreement or any Deed of Guarantee is declared invalid or unenforceable
by
any court of law;
|
then
and
at any time thereafter, the Lender may by written notice to the Borrower
terminate its obligations under this Agreement and/or demand immediate repayment
of the Loan, together with all other amounts payable under this Agreement,
whereupon they shall immediately become due and payable.
| (b) |
The
Borrower shall notify the Lender in writing of any Event of Default
promptly upon its occurrence.
|
|
13.
|
LENDER
REPRESENTATIONS
|
| (a) |
The
Lender represents that: (a) the Lender is taxable as a corporation
for
U.S. federal income tax purposes; (b) the interest income payable
under
the Loan is not effectively connected with a United States trade
or
business conducted by the Lender; (c) the Lender does not directly
or
indirectly own 10% or more of the combined voting power of the
Borrower’s
stock; (d) the Lender is not a controlled foreign corporation within
the
meaning of section 957(a) of the Code; (e) the Lender is not a
bank whose
execution of this Loan constitutes an extension of credit made
pursuant to
a loan agreement entered into in the ordinary course of its trade
or
business as described in section 881(c)(3)(A) of the
Code.
|
| (b) |
The
Lender shall use reasonable efforts to provide, on or prior to
May 1,
2008, a properly completed Internal Revenue Service Form W-8BEN
(or other
permissible W-8 Series Form) to the Borrower. The Lender shall
use
reasonable efforts to deliver to the Borrower an additional copy
of such
Form (or successor Form) on or before the date that such Form expires
or
becomes obsolete or after the occurrence of any event requiring
a change
in the most recent Form so delivered by it, in each case certifying
that
the Lender is entitled to an exemption from or a reduction of withholding
or deduction for or on account of United States federal income
taxes in
connection with the interest payments made under this Loan. The
Lender
will promptly notify the Borrower within 30 days of any changes
in
circumstances that would modify or render invalid any claimed exemption
or
reduction.
|
|
14.
|
TRANSFERS
|
| (a) |
The
Lender may assign and/or transfer all or any of its rights under
this
Agreement under the procedures described in Clause 14.(b), but
without any
increase of the amount or the scope of its obligations under this
Loan
Agreement. The Borrower may not assign or transfer any of its rights
or
obligations under this Agreement.
|
| (b) |
Transfer
of the Loan by the Lender or any subsequent Lender may only be
effectuated
by the surrender of this Loan Agreement to the Borrower and reissuance
of
a Loan Agreement of like terms. The Borrower shall comply within
30 days
to any request by the Lender pursuant to this Clause 14.(b). Subject
to
the foregoing, this Loan shall be binding upon and inure to the
benefit of
the Lender and the Borrower and their respective transferees, successors
and assigns.
|
8
|
15.
|
WAIVERS
|
No
failure or delay by the Lender in exercising any right, power or privilege
under
this Agreement shall operate as a waiver thereof or prejudice any other or
further exercise by the Lender of any of its rights or remedies under this
Agreement. The rights and remedies of the Lender under this Agreement are
cumulative and not exclusive of any rights or remedies provided by
law.
|
16.
|
NOTICES
AND ACCOUNTS
|
| (a) |
All
notices or other communications under or in connection with this
Agreement
shall be given in writing or by facsimile. A notice will be deemed
to be
given:
|
| (i) |
if
in writing, when delivered; and
|
| (ii) |
if
by facsimile, when received (confirmed by a letter, delivered
personally
or despatched by registered prepaid mail (airmail if overseas),
within
twenty-four hours of the despatch of the facsimile, but failure
to
despatch or receive that confirmation shall not prejudice the
effectiveness of the notice sent by
facsimile).
|
However,
a notice given in accordance with the above, but received on a day other
than a
Business Day or after 4.00 p.m. in the place of receipt, will only be deemed
to
be given on the next Business Day in that place.
| (b) |
Until
further notice given in accordance with the provisions of sub-clause
(a)
above, the following shall be the address for notices under this
Agreement:
|
| (i) |
if
to the Lender, to:
▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
Cay 1,
P.O.
Box 362, Road Town, Tortola,
British
Virgin Islands
|
| (ii) |
if
to the Borrower, to:
|
25025
Interstate ▇▇ ▇▇▇▇▇,
▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇▇▇▇
| (c) |
The
following bank accounts shall be used for disbursement of any
amount of
the Loan and (re)payment of any amount of the Loan or any other
amounts
owed hereunder, until further notice by either party to the
other:
|
| Borrower: |
Beneficiary:
Tekoil & Gas Corporation
|
Bank:
Regions Bank, Orlando Florida, USA
SWIFT:
▇▇▇▇▇▇▇▇
Account
No. 0033317186
ABA
No.
▇▇▇▇▇▇▇▇▇
With
SWIFT
| Lender: |
Beneficiary:
Tri-Star Capital Ventures Ltd.
Bank: Raiffeisen
Zentralbank, Vienna, Austria
Account
No. 70-50.682.137
IBAN: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
|
9
|
17.
|
GOVERNING
LAW
|
This
Agreement is governed by, and shall be construed and interpreted in accordance
with, the laws of England and Wales, without regard to its conflict of law
principles.
|
18.
|
ENFORCEMENT
|
| (a) |
The
English courts have exclusive jurisdiction to settle any dispute
in
connection with this Agreement.
|
| (b) |
The
English courts are the most appropriate and convenient courts to
settle
any such dispute.
|
| (c) |
(i)
Notwithstanding
the foregoing provisions of this Clause, the parties agree that
if the
Lender so requires, any dispute arising out of this Agreement (including
any question regarding its existence, validity or termination)
shall be
referred to and finally resolved by arbitration under the Rules
of
Arbitration of the London Court of International Arbitration (the
Rules)
by one arbitrator appointed in accordance with the said Rules,
which Rules
are deemed to be incorporated by reference into this Clause
18.
|
| (ii) |
The
seat of arbitration shall be London. The applicable law shall
be English
law.
|
| (iii) |
The
parties agree that the language of the arbitration, including oral
hearings, written evidence and correspondence, shall be
English.
|
| (iv) |
A
duly rendered arbitration award shall be final and binding on the
parties
to the dispute.
|
| (v) |
This
arbitration clause shall be separately
enforceable.
|
|
19.
|
SERVICE
OF PROCESS
|
| (a) |
The
Borrower hereby irrevocably appoints Trident Corporate Services
(UK)
Limited, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as its agent
under this
Agreement for service of process in any proceedings before the
English
courts.
|
| (b) |
If
any person appointed as process agent is unable for any reason
to act as
agent for service of process, the Borrower must immediately appoint
another agent on terms acceptable to the Lender. Failing this,
the Lender
may appoint another agent for this
purpose.
|
| (c) |
The
Borrower agrees that failure by a process agent to notify it of
any
process will not invalidate the relevant
proceedings.
|
| (d) |
This
Clause does not affect any other method of service allowed by
law.
|
| 20. |
WAIVER
OF IMMUNITY
|
Each
party irrevocably and unconditionally:
|
(a)
|
agrees
not to claim any immunity from proceedings brought by the other
party
against it in relation to this Agreement and to ensure that no
such claim
is made on its behalf;
|
10
|
(b)
|
consents
generally to the giving of any relief or the issue of any process
in
connection with those proceedings;
and
|
|
(c)
|
waives
all rights of immunity in respect of it or its
assets.
|
| 21. |
LANGUAGE
|
|
(a)
|
Any
notice given in connection with this Agreement must be in
English.
|
| (b) |
Any
other document provided in connection with this Agreement must
be:
|
| (i) |
in
English; or
|
| (ii) |
accompanied
by a certified English translation. In this case, the English translation
prevails unless the document is a statutory or other official document.
|
| 22. |
SEVERABILITY
|
If
a term
of this Agreement is or becomes invalid or unenforceable in any jurisdiction,
that shall not affect:
|
(a)
|
the
legality, validity or enforceability in that jurisdiction of any
other
term of this Agreement;
|
|
(b)
|
the
legality, validity or enforceability in other jurisdictions of
that or any
other term of this Agreement.
|
| 23. |
COUNTERPARTS
|
This
Agreement may be executed in any number of counterparts. This has the same
effect as if the signatures on the counterparts were on a single copy of
this
Agreement.
| 24. |
CONFIDENTIALITY
|
Each
party agrees and covenants to keep the existence, contents and substance
of this
Agreement and the transactions contemplated hereby (“Confidential
Information”)
confidential, and not (otherwise than with the consent of the other party
hereto
or as may be required to effect dispute resolution pursuant to Clause 18
hereof)
to disclose, or to allow disclosure by its respective affiliates, directors,
officers, employees, agents or representatives of Confidential Information
to
any third party other than such party’s accountants, auditors, legal and
financial advisors (who shall undertake a like duty of confidentiality, for
the
fulfilment of which duty the respective party engaging such advisors shall
be
responsible) or as required by law or by decision of any court (and, if so
required, only following consultation with the other party hereto). The terms
and requirements of this Clause shall be effective during the entire term
of
this Agreement and shall continue to be effective after the termination of
this
Agreement for an additional period of one (1) calendar year. The Lender hereby
consents to the disclosure of Confidential Information to ▇. ▇▇▇▇ & Company
and its affiliates (and their successors and assigns).
[remainder
intentionally left blank]
11
IN
WITNESS WHEREOF, the parties have caused their duly authorized representatives
to execute this Agreement on the date stated at the beginning of this
Agreement.
|
Lender
TRI
STAR CAPITAL VENTURES LIMITED
By
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Director
|
Borrower
TEKOIL
& GAS CORPORATION
By
/s/ ▇▇▇▇ ▇. Western
▇▇▇▇
▇. Western
Chief
Executive Officer
|
12
SCHEDULE
1
Form
of Deed of Guarantee
DEED
OF GUARANTEE
THIS
DEED
OF GUARANTEE is made on __ October 2007
BY
AND
BETWEEN:
| (1) |
[Name],
born ______ in _____, _____ passport number ______ issued
on _______ (the “Guarantor”),
and
|
| (2) |
Tri
Star Capital Ventures Limited,
a
company organised and existing under the laws of the British
Virgin
Islands with its registered address at ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Cay 1, P.O. Box 362, Road
Town,
Tortola, British Virgin Islands (the “Beneficiary”).
|
WHEREAS:
|
A.
|
Tekoil
& Gas Corporation (the “Obligor”)
wishes to borrow certain monies from the Beneficiary under a
Loan
Agreement between the Obligor and the Beneficiary dated on or
about the
date hereof (“Guaranteed
Agreement”);
|
|
B.
|
As
a condition to the Beneficiary agreeing to enter into the Guaranteed
Agreement and lend such monies, the Beneficiary requires this
Guarantee;
and
|
|
C.
|
The
Guarantor expects to derive substantial benefit from the Beneficiary
agreeing to lend such monies to the
Obligor.
|
IT
IS AGREED:
|
1
|
GUARANTEE
|
| 1.1 |
The
Guarantor as primary obligor hereby unconditionally and irrevocably
guarantees to the Beneficiary the due and punctual payment by
the Obligor
of all monies that are or may become due from the Obligor under
or in
respect of the Guaranteed Agreement including without limitation
the
principal of and interest on the loan made under the Guaranteed
Agreement
and any damages or other liability in respect of any breach of
the
Guaranteed Agreement (the “Guaranteed
Amounts”).
|
| 1.2 |
If
and whenever the Obligor defaults for any reason whatsoever in
the payment
of any Guaranteed Amount, the Guarantor shall forthwith upon
demand pay
(or procure the payment of) the Guaranteed Amount in regard to
which such
default has been made in the manner prescribed by the Guaranteed
Agreement
and so that the same benefits shall be conferred on the Beneficiary
as it
would have received if the Guaranteed Amounts had been duly paid
by the
Obligor.
|
| 1.3 |
This
deed is in addition to and not in substitution for any other
security
which the Beneficiary may at any time hold for payment of the
Guaranteed
Amounts and may be enforced without first having recourse to
any such
security and without taking any steps or proceedings against
the
Obligor.
|
| 1.4 |
As
a separate and independent stipulation the Guarantor agrees that
any of
the Guaranteed Amounts which may not be recoverable from or enforceable
against the Obligor by reason of any legal limitation, disability
or
incapacity on or of the Obligor, the invalidity of the Guaranteed
Agreement, the Obligor not being legally bound by the Guaranteed
Agreement
for failure of it being properly executed and delivered, or any
other fact
or circumstance (other than proper payment or performance, binding
written
waiver by the Beneficiary, or any limitation imposed by the Guaranteed
Agreement) shall nevertheless be recoverable from the Guarantor
as though
the same had been owed by the Guarantor and the Guarantor were
the sole or
principal obligor in respect thereof and shall be paid by the
Guarantor
forthwith upon demand.
|
13
|
2
|
NON-WAIVER
|
Neither
the Guarantor’s liability under this deed nor the rights, powers and remedies
conferred upon the Beneficiary by this Deed or by law shall be released,
impaired or discharged by any matter or thing which might operate to affect
or
prejudice such rights, powers and remedies including without
limitation:-
| 2.1 |
time
or any other concession, forbearance, forgiveness, indulgence
or
arrangement being given to the Obligor by the Beneficiary or
by anything
that the Beneficiary or the Obligor may do or omit or neglect
to do which,
but for this provision, might release or discharge the Guarantor’s
obligations hereunder;
|
| 2.2 |
any
invalidity, unenforceability, illegality or voidability of any
obligation
expressed to be assumed or owed by the Obligor under the Guaranteed
Agreement;
|
| 2.3 |
the
existence of any claim, set-off or other rights which the Guarantor
may
have at any time against the Obligor, the Beneficiary, or any
other person
or which the Obligor may have against the Guarantor, whether
in connection
with the Guaranteed Agreement or otherwise;
|
| 2.4 |
any
payment or discharge under the Guaranteed Agreement which is
avoided or
repaid as a consequence of the amalgamation, reorganisation,
liquidation,
dissolution, insolvency, receivership, administration or other
similar
process against the Obligor; or
|
| 2.5 |
any
compromise of any dispute with the Obligor, any failure of supervision
to
detect or prevent any fault by the Beneficiary or any assignment
of the
benefit of the Guaranteed
Agreement.
|
|
3
|
VARIATIONS.
NO INCREASE WITHOUT GUARANTOR’S
CONSENT.
|
The
Guarantor hereby authorises the Obligor and the Beneficiary to make any
addendum
or variation to the Guaranteed Agreement, and the Guarantor hereby guarantees
the due and punctual payment by the Obligor of all monies that are or may
become
due from the Obligor under or in respect of the amended Guaranteed Agreement
under the terms of this deed; provided
that
if any
such addendum or variation increases the principal amount of the loan under
the
Guaranteed Agreement (otherwise than as a result of compounding interest
as
provided therein), then unless it is made with the Guarantor’s express written
consent, such addendum or variation shall not increase the extent of the
Guarantor’s obligations and liabilities hereunder and this Deed and the
guarantees and undertakings in this Deed shall apply and extend only to
such
monies as were due under the Guaranteed Agreement prior to such addendum
or
variation and shall not apply to any monies due in respect of any drawdowns
made
pursuant to, or after, such addendum or variation.
|
4
|
DURATION
|
This
deed
shall be effective at the date of its execution and shall remain in force
for
the duration of the Guaranteed Agreement.
|
5
|
DISPUTED
CLAIMS
|
If
the
Obligor defaults in the payment of any Guaranteed Amount, the Beneficiary
shall
have the right to proceed against the Guarantor under this deed without
proceeding against or exercising or exhausting any other remedy against
the
Obligor. The Guarantor may exercise all defences, set-offs, counterclaims
and
other rights to which the Obligor is or may in respect of mature obligations
be
entitled under the Guaranteed Agreement and in any action brought by the
Beneficiary against the Guarantor under this deed the Guarantor may assert
any
such defence, set-off, counterclaim or other right as if the action had
been
brought by the Beneficiary against the Obligor under the Guaranteed
Agreement.
14
|
6
|
REPRESENTATIONS
AND WARRANTIES
|
The
Guarantor represents and warrants to the Beneficiary that:-
| 6.1 |
it
has the legal capacity and power to enter into, execute, deliver
and
perform this Deed;
|
| 6.2 |
the
execution, delivery and performance by it of this Deed do not
violate or
conflict in any material way with any law applicable to it, any
order or
judgment of any court or other agency of government applicable
to it or
any of its assets or any contractual restriction binding on or
affecting
it or any of its assets; and
|
| 6.3 |
its
obligations under this Deed constitute its legal, valid and binding
obligations, enforceable in accordance with their respective
terms
(subject to applicable bankruptcy, insolvency, moratorium or
similar laws
affecting creditors' rights generally and subject, as to enforceability,
to equitable principles of general
application).
|
|
7
|
SECURITY
|
| 7.1 |
The
Guarantor represents and warrants that it has not taken or received
and
will not take or receive any security from the Obligor for or
in respect
of the Guarantor’s obligations under this
Deed.
|
| 7.2 |
If
at any time the Guarantor has the benefit of any security in
breach of
this Clause 7, it shall hold such security on trust for the Beneficiary
and shall upon request by the Beneficiary, transfer or assign
such
security to the Beneficiary as security for the Guarantor’s obligations
under this deed.
|
|
8
|
NON-DUPLICATION
|
The
Beneficiary shall not be entitled to recover its loss more than once from
the
Guarantor or the Obligor or any other guarantor. Nothing in this Deed shall
affect the obligation of the Beneficiary to mitigate its loss.
|
9
|
ASSIGNMENT
|
| 9.1 |
The
Beneficiary may not assign or transfer any of its rights or obligations
under this Deed without the Guarantor’s
consent.
|
| 9.2 |
The
Guarantor may not assign or transfer any of its rights or obligations
under this Deed without the Beneficiary’s
consent.
|
|
10
|
REMEDIES
AND WAIVERS
|
| 10.1 |
No
delay or omission on the part of the Beneficiary in exercising
any right,
power or remedy provided by law or under this Deed shall impair
such
right, power or remedy or operate as a waiver thereof or of any
other
right, power or remedy.
|
| 10.2 |
The
single or partial exercise by the Beneficiary of any right, power
or
remedy provided by law or under this deed shall not preclude
any other or
further exercise thereof or the exercise of any other right,
power or
remedy.
|
| 10.3 |
The
rights, powers and remedies provided by this Deed are cumulative
with, and
not exclusive of, any rights, powers and remedies provided by
law.
|
15
|
11
|
PROPER
LAW AND JURISDICTION
|
| 11.1 |
This
Deed shall be governed by, and shall be construed and interpreted
in
accordance with, the laws of England and Wales, without regard
to its
conflict of law principles.
|
| 11.2 |
The
English courts have exclusive jurisdiction to settle any dispute
in
connection with this Agreement.
|
| 11.3 |
The
English courts are the most appropriate and convenient courts
to settle
any such dispute.
|
| 11.3.1 |
Notwithstanding
the foregoing provisions of this Clause, the parties agree that
if the
Beneficiary so requires, any dispute arising out of this Agreement
(including any question regarding its existence, validity or
termination)
shall be referred to and finally resolved by arbitration under
the Rules
of Arbitration of the London Court of International Arbitration
(the
Rules)
by one arbitrator appointed in accordance with the said Rules,
which Rules
are deemed to be incorporated by reference into this Clause
17.
|
| 11.3.2 |
The
seat of arbitration shall be London. The applicable law shall
be English
law.
|
| 11.3.3 |
The
parties agree that the language of the arbitration, including
oral
hearings, written evidence and correspondence, shall be
English.
|
| 11.3.4 |
A
duly rendered arbitration award shall be final and binding on
the parties
to the dispute.
|
| 11.3.5 |
This
arbitration clause shall be separately
enforceable.
|
|
12
|
SERVICE
OF PROCESS
|
| 12.1 |
The
Guarantor hereby irrevocably appoints Trident Corporate Services
(UK)
Limited, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as its agent
under this
Agreement for service of process in any proceedings before the
English
courts.
|
| 12.2 |
If
any person appointed as process agent is unable for any reason
to act as
agent for service of process, the Guarantor must immediately
appoint
another agent on terms acceptable to the Beneficiary. Failing
this, the
Beneficiary may appoint another agent for this
purpose.
|
| 12.3 |
The
Guarantor agrees that failure by a process agent to notify it
of any
process will not invalidate the relevant
proceedings.
|
| 12.4 |
This
Clause does not affect any other method of service allowed by
law.
|
|
13
|
NOTICES
|
| 13.1 |
Any
notice required to given to the Guarantor under this Deed shall
be in
writing and delivered personally or sent by commercial courier
to the
address included for Guarantor on the signature page hereof or
to such
other address as the Guarantor may from time to time specify
in writing to
the Beneficiary. Any notice shall be deemed to have been served
when
actually delivered.
|
16
In
witness whereof, this deed has been executed and delivered as a deed on
the date
first mentioned above.
Signed
and delivered as a deed by
[NAME
OF GUARANTOR]
Signature:
____________________
Address
for Notice Purposes:
_______________________________
_______________________________
_______________________________
Facsimile:
_______________________
in
the
presence of:
Witness
|
Signature
of witness:
|
__________________
|
|
Name
of witness:
|
__________________
|
|
Address
of witness:
|
__________________
|
|
__________________
|
Signed
and delivered as a deed by
TRI
STAR CAPITAL VENTURES LIMITED
By
___________________________
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Director
in
the
presence of:
Witness
|
Signature
of witness:
|
__________________
|
|
Name
of witness:
|
__________________
|
|
Address
of witness:
|
__________________
|
|
|
__________________
|
17
SCHEDULE
2
Form
of Drawdown Notice
____________,
20071
3rd
Floor, ▇▇▇▇ ▇▇▇▇▇ Building
Wickhams
Cay I
▇.▇.
▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention:
Directors
Facsimile:
+ [ ]
RE:
Loan
Agreement dated as of [ ]
Dear
Madam / Sir,
Reference
is made to the Loan Agreement dated as of [ ] between Tri Star
Capital
Ventures Limited (as “Lender”) and Tekoil & Gas Corporation (as “Borrower”)
(the “Loan Agreement”). Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
Pursuant
to clause 5(a) of the Loan Agreement, I hereby request disbursement of
an amount
equal to US$ _______ (__________ United States Dollars) on
____________2
by means
of bank wire transfer to the following account and in accordance with the
following instructions:
|
Recipient’s
Account:
|
_______________
|
|
|
Recipient’s
Bank Name:
|
_______________
|
|
|
Recipient’s
Bank address:
|
_______________
|
|
|
Recipient’s
Bank SWIFT:
|
_______________
|
|
|
[Recipient’s
Bank Sort Code:
|
_______________]
|
|
|
[Correspondent
Account:
|
_______________]
|
|
|
[Correspondent
Bank Name:
|
_______________]
|
|
|
[Correspondent
Bank SWIFT:
|
_______________]
|
|
|
Message:
|
_______________
|
Please
confirm disbursement in accordance with the foregoing instructions by means
of a
written notice with bank confirmation of the transfer as requested. Thank
you
very much.
Sincerely
yours,
[ ]
|
1
|
Date
of this Disbursement Request must be at least two (2) Business
Days prior
to the Disbursement Date.
|
| 2 |
Disbursement
Date must be at least two (2) Business Days after the date
of this
Disbursement Request.
|
18