Exhibit 10.72
ASSUMPTION AGREEMENT
THIS
ASSUMPTION AGREEMENT (this “ Agreement ”) dated
as of November 19, 2007, is made by and among G M Oil
Properties, Inc., an Oklahoma corporation (“ GM Oil
”), Rio Vista Penny LLC, an Oklahoma limited liability
company (“ Penny ”), TCW Asset Management
Company, as administrative agent (“ Administrative
Agent ”), and the holders party to the Note Purchase
Agreement described below (“ Holders ”).
WITNESSETH THAT:
WHEREAS, GM
Oil has issued and sold to Holders those certain promissory notes
dated as of August 29, 2005, payable to the order of Holders,
in the aggregate original principal amount of $30,000,000 (the
“ Notes ”), the payment of which Notes is
secured by the documents listed in Exhibit A attached
hereto and made a part hereof (the “ Security
Documents ”), covering certain real and personal property
described therein (the “ Mortgaged Property ”),
reference being here made to the Note Purchase Agreement (as
hereinafter defined) and the Security Documents and the record
thereof for all purposes and for the meaning as set forth therein
of all capitalized terms used in this Agreement and not otherwise
defined herein (the foregoing documents and all other documents
executed by GM Oil and/or any other party or parties evidencing or
securing or otherwise in connection with the loans evidenced by the
Notes being herein collectively called the “ Note
Documents ”);
WHEREAS, the
Notes were issued and sold pursuant to that certain Note Purchase
Agreement dated as of August 29, 2005 (as amended,
supplemented or restated, the “ Note Purchase
Agreement ”), by and among GM Oil, Administrative Agent,
and Holders;
WHEREAS,
certain of the Note Documents provide that the indebtedness secured
thereby may, at the option of the holders thereof, be accelerated
if any or all of the Mortgaged Property is sold or conveyed without
the consent of Holders;
WHEREAS, GM
Oil and Penny entered into that certain Asset Purchase Agreement
dated as of October 1, 2007, as amended by that certain
Amendment to Asset Purchase Agreement dated of even date herewith
between GM Oil and Penny (as so amended, the “ Asset
Purchase Agreement ”), wherein GM Oil agreed to convey
all of the Mortgaged Property to Penny and Penny agreed to assume
all indebtedness and obligations owing by GM Oil under the Note
Documents as set forth therein;
WHEREAS,
Holders have been requested to consent to the conveyance of the
Mortgaged Property to Penny and Holders are willing to so consent
upon compliance with the terms and provisions of this
Agreement;
WHEREAS,
Defaults and Events of Defaults now exist and are continuing under
the Note Purchase Agreement; and
WHEREAS,
Holders are the owners and holders of the Notes, and Penny is
contemporaneously herewith becoming the owner of the legal and
equitable title to the Mortgaged Property;
[ASSUMPTION AGREEMENT]
NOW,
THEREFORE, for and in consideration of the mutual covenants
contained herein and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Holders hereby consent to the above described conveyance of
the Mortgaged Property upon the terms and conditions set forth in
the Asset Purchase Agreement, subject to the liens, security
interests and assignments created by the Security Documents and
waives their option to accelerate as provided in certain of the
Note Documents arising in respect of such conveyance, without
prejudice to its rights with respect to any future conveyance of
said property or any interest therein.
2. Penny
hereby assumes and promises to pay according to the terms thereof
all Obligations and also assumes and promises to keep and perform
all other covenants and obligations in the Note Purchase Agreement
to be performed by the borrower thereunder, and all other
obligations of the maker of the Notes under any and all other Note
Documents.
3. Holders hereby agree that GM Oil shall have no obligation
or liability under the Note Documents from and after the date of
this Agreement.
4. Penny
and GM Oil have requested that Administrative Agent and Holders
waive the Designated Defaults (defined below), and Administrative
Agent and Holders have agreed to do so on the terms set forth
herein. Accordingly, subject to the conditions and limitations set
forth herein, and the agreements of Penny and GM Oil contained
herein, Administrative Agent and Holders hereby waive the
Designated Defaults; provided that such waiver (a) shall not
be deemed or construed as a waiver of the obligation of Penny to
pay the amounts due described in clauses (a) and (b) of
the definition of Designated Defaults, and (b) Penny shall pay
all accrued and unpaid interest that was due and payable on
September 27, 2007 in the amount of $590,868.06 on or before
November 21, 2007.
As used in
this Section 4, “ Designated Defaults ”
means the following Defaults or Events of Default that have
occurred as of the date of this Agreement and are continuing under
the Note Purchase Agreement:
(a) On the Quarterly Payment Date of June 28, 2007, GM
Oil failed to pay the Minimum Scheduled Quarterly Principal
Payment, as required by Section 2.8 of the Note Purchase
Agreement.
(b) On the Quarterly Payment Date of September 27, 2007,
GM Oil failed to pay the Minimum Scheduled Quarterly Principal
Payment, together with all accrued and unpaid interest, as required
by Section 2.8 of the Note Purchase Agreement.
(c) GM Oil failed to deliver to Holder Parties a semi-annual
Engineering Report, effective as of May 1, 2007, prior to
June 1, 2007, as required by Section 7.2(i) of the Note
Purchase Agreement.
(d) GM Oil’s failure to comply with Section 7.4(b)
of the Note Purchase Agreement by notifying each Holder Party in
writing of the occurrence of the above Defaults or Events of
Default under the Note Purchase Agreement.
[ASSUMPTION AGREEMENT]
2
(e) The acquisition and ownership by Penny Petroleum
Corporation, an Oklahoma corporation, and GO, LLC, an Oklahoma
limited liability company, of interests in the Project Area and
their failure to transfer or convey such interests to GM Oil.
(f) The acquisition and ownership by Concorde Resource Corp.,
an Oklahoma corporation, of interests in the Project Area and its
failure to transfer or convey such interests to GM Oil.
5. Penny
hereby represents and warrants that (a) Penny, upon the
consummation of the transfer set forth in the Asset Purchase
Agreement, is the sole legal and beneficial owner of the Mortgaged
Property; (b) Penny is a limited liability company that is
duly organized and legally existing in good standing under the laws
of the State of Oklahoma; (c) the execution and delivery of,
and performance under this Agreement are within Penny’s power
and authority without the joinder or consent of any other party and
have been duly authorized by all requisite action and are not in
contravention of the powers of Penny’s certificate of limited
liability company, operating agreement, or other company papers;
(d) this Agreement constitutes the legal, valid and binding
obligation of Penny enforceable in accordance with its terms;
(e) the execution and delivery of this Agreement by Penny do
not contravene, result in a breach of or constitute a default under
any deed of trust, loan agreement, indenture or other contract,
agreement or undertaking to which Penny is a party or by which
Penny or any of its properties may be bound (nor would such
execution and delivery constitute such a default with the passage
of time or the giving of notice or both) and do not violate or
contravene any law, order, decree, rule or regulation to which
Penny is subject; and (f) there exists no uncured Default or
Event of Default under the Notes, the Note Purchase Agreement, or
any other Note Document (other than the Designated Defaults). Penny
agrees to indemnify and hold each Holder Party harmless against any
loss, claim, damage, liability or expense (including without
limitation attorneys’ fees) incurred as a result of any
representation or warranty made by it herein proving to be untrue
in any respect.
6. GM Oil
hereby represents and warrants that (a) GM Oil, prior to the
transfer set forth in the Asset Purchase Agreement, is the sole
legal and beneficial owner of the Mortgaged Property; (b) GM Oil is
a corporation duly incorporated and legally existing under the laws
of the State of Oklahoma; (c) the execution and delivery of,
and performance under this Agreement are within GM Oil’s
power and authority without the joinder or consent of any other
party and have been duly authorized by all requisite action and are
not in contravention of the powers of GM Oil’s articles of
incorporation, by-laws or other corporate papers; (d) this
Agreement constitutes the legal, valid and binding obligation of GM
Oil enforceable in accordance with its terms; (e) the
execution and delivery of this Agreement by GM Oil do not
contravene, result in a breach of or constitute a default under any
deed of trust, loan agreement, indenture or other contract,
agreement or undertaking to which GM Oil is a party or by which GM
Oil or any of its properties may be bound (nor would such execution
and delivery constitute such a default with the passage of time or
the giving of notice or both) and do not violate or contravene any
law, order, decree, rule or regulation to which GM Oil is subject;
an
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