SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT Trinity Bay, Redfish Reef, Fishers Reef, North Point Bolivar Fields in Galveston and chambers Counties, Texas
EXHIBIT
10.28
SIXTH
AMENDMENT TO PURCHASE AND SALE AGREEMENT
Trinity
Bay, Redfish Reef, Fishers Reef, North Point ▇▇▇▇▇▇▇
▇▇▇▇▇▇
in
Galveston and ▇▇▇▇▇▇▇▇ Counties, Texas
This
SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
(the
“Sixth Amendment”) is dated effective as of April 24, 2007, and is made by and
between Masters
Resources, LLC,
and
Masters
Oil & Gas, LLC,
both
Texas limited liability companies having their respective principal places
of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (collectively,
“Masters”), and Tekoil
and Gas Gulf Coast, LLC,
a
Delaware limited liability company, having its principal place of business
at
▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Buyer”) (Masters
and Buyer are sometimes called collectively the “parties” and individually
“party”).
RECITALS
On
November 13, 2006, Masters and Tekoil and Gas Corporation, a Delaware
corporation (“Original Buyer”), executed and delivered a Purchase and Sale
Agreement, dated effective as of October 1, 2006, covering the “Assets”
described therein. On December 29, 2006, Masters and Original Buyer executed
and
delivered that certain First Amendment to Purchase and Sale Agreement also
covering the Assets. On February 8, 2007, the parties contemporaneously executed
and delivered that certain Second Amendment and that certain Assignment and
Assumption Agreement (the “Assignment”) by and between Buyer and Original Buyer.
On March 1, 2007, Masters and Buyer executed and delivered that certain Third
Amendment to Purchase and Sale Agreement also covering the Assets. On March
22,
2007 Masters and Buyer executed and delivered that certain Fourth Amendment
to
Purchase and Sale Agreement also covering the Assets. On April 12, 2007, Masters
and Buyer executed and delivered that certain Fifth Amendment to Purchase and
Sale Agreement (the “Fifth Amendment”) also covering the Assets (the Purchase
and Sale Agreement, the First Amendment to Purchase and Sale Agreement, the
Second Amendment to the Purchase and Sale Agreement, the Third Amendment to
the
Purchase and Sale Agreement, the Fourth Amendment to the Purchase and Sale
Agreement and the Fifth Amendment to the Purchase and Sale Agreement are herein
collectively referred to as the “Original Agreement”). The parties now desire to
amend the Original Agreement in certain respects. Accordingly, the parties
agree
as set out in this Sixth Amendment. (Unless otherwise noted, defined terms
used
in this Sixth Amendment shall have the meanings ascribed to them in the Original
Agreement).
I. AMENDMENTS
A. The
opening paragraph of Section 2.1 of the Original Agreement is deleted and the
following is inserted in lieu thereof:
“2.1 Purchase
Price
The
Purchase Price for the Assets will be Thirty Million and No/100 Dollars
($30,000,000.00), plus
9,000,000
shares of common stock of Original Buyer1 (the
“Common Stock”), plus
the
reservation at Closing by Masters of the overriding royalty interests described
in this Section 2.1 hereinbelow (as amended by the Fifth Amendment). Such
overriding royalty interests shall be subject to a deed of trust in favor of
Buyer securing the obligations of Masters under the separately executed ▇▇▇▇▇▇▇
Indemnity Agreement between Masters and Buyer providing that the revenue and
proceeds from such interests shall be deposited to an account with a financial
institution and subject to an account control agreement providing that amounts
therein may be used, at Buyer’s sole discretion, if
the
▇▇▇▇▇▇▇ dispute is not settled to the reasonable satisfaction of Buyer, as
further provided in the Indemnity Agreement."
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Both
parties acknowledge that all references to “Buyer” in Section 2.1 (B) of the
Original Agreement shall be amended to “Original Buyer.”
B.
The
reference in the first line of Section 2.1(B) (as amended by the Fifth
Amendment) to 4,000,000 shares is deleted and replaced with “9,000,000
shares”.
C. Section
8.1 of the Original Agreement is deleted and the following is inserted in lieu
thereof:
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“8.1
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Date,
Time and Place of Closing
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Unless
the parties agree otherwise in writing and subject to the provisions in this
Agreement, the completion of the transaction contemplated by this Agreement
(the
“Closing”) will be held on or
before
May 11,
2007, at 10:00 a.m. Central Standard Time (or such earlier date or time as
the
parties may agree). The Closing will be held at the offices of Masters as set
forth in the opening paragraph of this Agreement (or such other place as the
parties may agree). In the event that the Closing does not occur before the
close of business at 5:00 p.m. on May 11, 2007, Masters shall have the right
to
terminate this Agreement and to retain the Deposit.”
D. That
certain Amended and Restated Subscription Agreement between Masters and Original
Buyer of even date of the Fifth Amendment and substantially in the form attached
as Exhibit C thereto is hereby superseded entirely by a certain Second Amended
and Restated Subscription Agreement between Masters and Original Buyer of even
date herewith substantially in the form attached hereto as Exhibit
A.
E. The
Registration Rights Agreement executed December 29, 2006 by and between Masters
and Original Buyer in connection with the Subscription Agreement, is subject
to
the amendments made herein and the Common Stock described herein shall
constitute the “Registrable Securities” thereunder.
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II. MISCELLANEOUS
A. To
the
extent any provision of the Original Agreement, conflicts with any provision
of
this Sixth Amendment, the provisions of this Sixth Amendment shall control
and
be used to determine the obligations of the Parties.
B. The
parties ratify confirm and adopt the Original Agreement as amended and
supplemented by this Sixth Amendment.
C. Facsimile
delivery of this Sixth Amendment signed by each party to the other shall be
binding and effective the same as if an original signed copy has been delivered
by each party to the other. This Sixth Amendment may be executed in multiple
counterparts, each of which shall be considered an original and all of which
together shall constitute one and the same document.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Sixth Amendment as of the date and year first
above written.
[SIGNATURE
PAGE FOLLOWS]
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TEKOIL
AND GAS GULF COAST, LLC
By: Tekoil
& Gas Corporation,
Its
Sole
Member
By: /s/
▇▇▇▇
▇. Western
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
| MASTERS RESOURCES, LLC: | MASTERS OIL & GAS, LLC: | |
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| By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ |
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Name: ▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Manager
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Name: ▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Manager
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EXHIBIT
A TO SIXTH AMENDMENT
TEKOIL
& GAS CORPORATION
SECOND
AMENDED AND RESTATED
SUBSCRIPTION
AGREEMENT
This
Agreement supersedes and replaces a certain Amended and Restated Subscription
Agreement executed by the parties hereto as of April 12, 2007.
THE
COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE
SECURITIES LAWS. THE COMMON STOCK MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
1. Subscription.
Subscriber (as identified on the signature page attached hereto) hereby
subscribes for and agrees to be issued Nine Million (9,000,000) shares of Common
Stock (the “Common
Stock”)
of
Tekoil & Gas Corporation, a Delaware corporation (the “Company”),
all
as consideration under the “PSA” described below. The Common Stock is also
referred to herein as the “Securities”.
2. Consideration.
The
Securities constitute a portion of the consideration payable by the Company
to
Subscriber under a certain Purchase and Sale Agreement dated November ___,
2006,
and as amended December 29, 2006, in connection with the acquisition and sale
of
certain assets described therein, as amended through the date hereof (referred
to together as the “PSA”).
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the PSA.
3. Subscriber's
Representations and Warranties.
Subscriber represents, warrants, acknowledges and agrees that:
(a) Subscriber
is a resident of the state indicated on the signature page hereof, is legally
competent to execute this Second Amended and Restated Subscription Agreement,
and:
(i) if
Subscriber is an individual, has his or her principal residence in such
state;
(ii) if
Subscriber is a corporation, partnership, trust, limited liability company
or
other form of business organization, has its principal office in such state;
or
(iii) if
Subscriber is a corporation, partnership, trust, limited liability company
or
other form of business organization, Subscriber has not been organized for
the
specific purpose of acquiring the Common Stock.
(b) Subscriber
has not been offered the Securities by any form of general solicitation or
general advertising, including but not limited to any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(c) Subscriber
has had access during the course of this transaction and prior to the issuance
of the Securities to all information necessary to enable Subscriber to evaluate
the merits and risks of a prospective investment in the Company (including,
without limitation, the periodic and other reports filed by the Company with
the
U.S. Securities and Exchange Commission (the “SEC”) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), and Subscriber has had
the opportunity to ask questions of and receive answers from the officers and
directors of the Company, or a person or persons acting on its behalf,
concerning the terms and conditions of the offering and all questions raised
by
Subscriber have been answered to the full satisfaction of
Subscriber.
(d) There
are
substantial restrictions on the transferability of the Securities and,
accordingly, Subscriber will need to bear the economic risk of the investment
in
the Securities for an indefinite period of time and will not be readily able
to
liquidate the investment in case of an emergency.
(e) Subscriber
understands that the Company has a limited financial or operating history,
each
of the Securities is a speculative investment which involves a high degree
of
financial risk, and there is no assurance of any economic, income or tax benefit
from such investment.
(f) In
making
this investment, Subscriber is relying solely upon the advice of Subscriber's
personal tax advisors, and not the Company nor its advisers and counsel, with
respect to the tax aspects of an investment in the Securities.
(g) If
Subscriber is a corporation, partnership, trust, limited liability company,
employee benefit plan or other entity, Subscriber is authorized and qualified
to
become a stockholder of the Company and the person signing this Second Amended
and Restated Subscription Agreement on behalf of such entity has been duly
authorized by such entity to do so.
(h) No
representations or warranties have been made to Subscriber by the Company or
any
officer, employee, agent or affiliate of the Company (other than those set
forth
in the PSA), and Subscriber's investment decision has been based solely upon
Subscriber's independent evaluation and due diligence, if any, of the
Company.
(i) Subscriber
is experienced in evaluating and investing in early stage companies such as
the
Company. Subscriber is experienced in business matters and regards himself,
herself or itself as a sophisticated investor able to evaluate investment and
financial information and to choose independent professional advisors to assist
in such evaluation and, either alone or with such advisers, has such knowledge
and experience in financial and business matters that Subscriber is capable
of
evaluating the merits and risks of an investment in the Securities and has
the
capacity to protect Subscriber’s own interests in connection with Subscriber’s
proposed investment in the Securities.
(j) Subscriber’s
aggregate commitments to investments that are not readily marketable are not
disproportionate to Subscriber’s net worth and an investment in the Securities
will not cause such aggregate commitment to become excessive. Subscriber has
adequate means of providing for Subscriber’s current needs and possible personal
and family contingencies. Subscriber will not be readily able to liquidate
the
investment in the case of an emergency, and Subscriber has no need for liquidity
in this investment in the Company.
(k) Subscriber
has a preexisting business or personal relationship with the Company or with
one
or more of its officers or directors. Except for Subscriber’s intention to
distribute the shares (or cause them to be issued directly) to its members,
pro-rata, on condition that they make the representations, warranties and
agreements herein provided in favor of Company, Subscriber is acquiring the
Securities solely for Subscriber’s own account for investment (and not for the
account of any other person), and not with a view to, or for, any resale,
distribution, fractionalization or other transfer thereof, and Subscriber has
no
present plans to enter into any contract, undertaking, agreement or arrangement
for any such resale, distribution, fractionalization or transfer.
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4. Representations
and Warranties Concerning Suitability and Accredited Investor
Status.
Subscriber hereby represents and warrants to the Company that Subscriber is
an
“Accredited Investor” (as defined under Regulation D as promulgated and
amended by the SEC pursuant to the Securities Act) on the basis of the
representations made by Subscriber to the Company below. Subscriber hereby
represents and warrants and agrees that:
(a) Subscriber
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Company
and
has obtained sufficient information from the Company to evaluate the merits
and
risks of an investment in the Company.
(b) Subscriber
has determined that the Securities are a suitable investment for Subscriber.
Subscriber is able to bear the economic risk of the investment in the Company
(including a complete loss thereof) and has adequate financial or other means
for providing for Subscriber's current needs and contingencies and has no need
for liquidity in this investment.
5. Fees
and Expenses.
Subscriber shall pay for all its own fees and expenses in connection with this
subscription, including without limitation legal fees and fees of its advisors
and counsel, if any.
6. Restrictions.
The
Subscriber will not at any time make any disposition of any of the Securities
except in accordance with applicable federal and state securities laws and
the
legend set forth below. The certificates for the Securities, the Note and the
Conversion Stock to be issued to the undersigned will bear a legend in
substantially the following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES
MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR SUCH LAWS.
In
the
event the Common Stock may be publicly resold under the Registration Rights
Agreement or otherwise under applicable securities laws, Subscriber agrees
that
it will not publicly resell more than 250,000 shares thereof per calendar week.
Subscriber agrees that a legend reflecting the foregoing and reasonable transfer
restrictions consistent therewith may be placed on the Common
Stock.
7. Miscellaneous.
The
terms and conditions contained in this Second Amended and Restated Subscription
Agreement (together with the PSA and a certain Registration Rights Agreement
executed by the Company and Subscriber of even date herewith) constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersede all previous agreements and understandings, whether oral or
written, between the parties hereto with respect to the subject matter hereof.
This Second Amended and Restated Subscription Agreement shall be construed
in
accordance with and governed by the laws of the State of Delaware. This Second
Amended and Restated Subscription Agreement may be amended only by a writing
executed by the Company and Subscriber.
3
IN
WITNESS WHEREOF,
Subscriber has executed this Second Amended and Restated Subscription Agreement
on the date indicated on the signature page hereof.
[SIGNATURES
ON NEXT
PAGE]
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The
undersigned Subscriber confirms and certifies that Subscriber has read this
entire Second Amended and Restated Subscription Agreement and understands the
provisions hereof, and that the undersigned has executed this Second Amended
and
Restated Subscription Agreement as of the date set forth below.
DATED:
April ____, 2007
Which
will be held by Subscriber(s) in the following manner, if
applicable:
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( )
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Community
Property
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( )
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Joint
Tenants with Right of Survivorship
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Tenants
in Common
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( )
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Separate
Property
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( )
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Other:
(e.g. individual, corporation, partnership, limited liability company,
trust, investment company). Please indicate:_____________.
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Subscriber
Signature(s)
| MASTERS RESOURCES, LLC |
MASTERS
OIL & GAS, LLC
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Name
and Title of Signatory if Subscriber is
an
entity
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Signature |
Signature of Joint Subscriber |
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Social
Security or Tax ID Number
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Social Security or Tax ID Number of Joint Subscriber |
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Address |
Address of Joint Subscriber |
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| Reviewed and Advised By (if any): | Accepted By: | ||
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Subscriber’s Professional Advisor |
TEKOIL & GAS
CORPORATION,
a
Delaware corporation
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Name |
Signature |
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Address
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Name/Title |
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Note:
In
the
case of subscription by,
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·
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Joint
Tenants
with Rights of Survivorship or Tenants
in Common,
all tenants must execute this
subscription,
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·
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Husband
and Wife,
as community property, one signature only is
required.
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·
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A
Trust,
the Trustee must sign and a copy of the Trust Agreement should be
provided.
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·
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A
Partnership,
a
copy of the Statement of Partnership or the Partnership Agreement
should
be provided, and execution must be by the number of partners required
therein to bind the Partnership.
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·
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A
Corporation,
a
resolution of the Board of Directors authorizing the subscription
and
certified by the Secretary should be
included.
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