Ex. 10.14
FORBEARANCE AGREEMENT
FORBEARANCE AGREEMENT, dated of as July 15, 2008 by and between
GULF
COAST OIL & GAS, INC. (the "Company"), and CERTAIN WEALTH, LTD.
("CERTAIN
WEALTH"). All capitalized terms used herein shall have the
respective meanings
assigned thereto in the Transaction Documents (as defined below)
unless
otherwise defined herein.
W I T N E S S E T H:
WHEREAS, the Company and Certain Wealth have entered into
certain
financing arrangements set forth on SCHEDULE A attached hereto and
referred to
herein as the "TRANSACTION DOCUMENTS" pursuant to which, Certain
Wealth is the
holder of the following secured convertible debentures
(collectively, the
"DEBENTURES") issued by the Company:
<TABLE>
<CAPTION>
<S> <C>
<C>
<C>
<C>
<C>
<C>
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DEBENTURE DESCRIPTION
PRINCIPAL OUTSTANDING
ACCRUED AND UNPAID INTEREST
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10% Secured
Convertible Debenture
issued
USD $ 207,383.00
$ 32,180.29
on February 1, 2006,
due February 1, 2009
in the
face
amount
of $250,000.
(for both Debentures CW-1 and CW-2)
(Debenture No. CW-1)
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10% Secured
Convertible Debenture
issued
USD $ 0
(see above)
on April 5, 2006,
due April 5, 2009 in
the face amount of
$250,000. (Debenture
No. CW-2)
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</TABLE>
The amounts referenced in this chart above are as of June 1, 2008
and
do not include any additional costs, charges, expenses, or
liquidated damages.
WHEREAS, the Company has breached the terms of the Transaction
Documents as set forth in the default letter forwarded to the
Company from YA
Global Investments, L.P. dated March 17, 2008 (the "EXISTING
DEFAULTS") a copy
of which is attached hereto as Exhibit A; and
WHEREAS, Certain Wealth is willing to agree to forbear from
exercising
certain of its rights and remedies on the terms and conditions
specified herein;
NOW, THEREFORE, in consideration of the foregoing, and the
respective
agreements, warranties and covenants contained herein, the parties
hereto agree,
covenant and warrant as follows:
1
<PAGE>
1.
ACKNOWLEDGMENTS.
a.
ACKNOWLEDGEMENT OF OBLIGATIONS. The Company hereby
acknowledges,
confirms and agrees that as of the date hereof, the Company is
indebted to Certain Wealth under the Debentures and the
Transaction Documents in the outstanding principal amount plus
accrued and unpaid interest thereon set forth in the first
Whereas clause above. In addition to the principal and interest
set forth herein, all interest accrued and accruing hereafter
and
all liquidated damaged, fees, costs, expenses and other charges
now or hereafter payable by the Company to Certain Wealth under
the Transaction Documents (collectively, the "OBLIGATIONS"),
are
unconditionally owing by the Company to Certain Wealth, without
offset, defense or counterclaim of any kind, nature or
description whatsoever.
b.
ACKNOWLEDGEMENT OF SECURITY INTERESTS. The Company hereby
acknowledges, confirms and agrees that Certain Wealth has and
shall continue to have valid, enforceable and perfected
first-priority liens upon and security interests in the Pledged
Property heretofore granted to Certain Wealth pursuant to the
Security Agreement between the Company and Certain Wealth dated
February 1, 2006 or otherwise granted to or held by Certain
Wealth. The Company
hereby acknowledges, confirms and agrees that
Certain Wealth has and shall continue to have valid,
enforceable
and perfected first-priority liens upon and security interests
in
the Pledged Property heretofore granted to Certain Wealth
pursuant to the Security Agreement between the Company and
Certain Wealth dated February 1, 2006 or otherwise granted to
or
held by the Certain Wealth.
c. BINDING EFFECT OF DOCUMENTS.
The Company hereto acknowledges,
confirms and agrees that: (a) each of the Transaction Documents
to which it is a party has been duly executed and delivered to
Certain Wealth by the Company, and each is in full force and
effect as of the date hereof, (b) the agreements and
obligations
of the Company contained in such documents and in this
Agreement
constitute the legal, valid and binding obligations of the
Company, enforceable against each in accordance with their
respective terms, and the Company has no valid defense to the
enforcement of such obligations, and (c) Certain Wealth is and
shall be entitled to the rights, remedies and benefits provided
for in the Transaction Documents and applicable law, without
setoff, defense or counterclaim of any kind, nature or
descriptions whatsoever.
2.
FORBEARANCE IN RESPECT OF CERTAIN EVENTS OF DEFAULT.
a.
ACKNOWLEDGEMENT OF DEFAULT. The Company hereby acknowledges and
agrees that the Existing Defaults have occurred and are
continuing, and each constitutes an Event of Default and
entitles
Certain Wealth to exercise its rights and remedies under the
Transaction Documents, applicable law or otherwise. The Company
further represents and warrants that as of the date hereof no
other Event of Default under the Transaction Documents exist.
Certain Wealth has not waived, presently do not intend to waive
and may never waive such Existing Defaults and nothing
contained
herein or the transactions contemplated hereby shall be deemed
to
constitute any such waiver. The Company hereby acknowledges and
agrees that Certain Wealth has the presently exercisable right
to
declare the Obligations to be immediately due and payable under
the terms of the Transaction Documents.
2
<PAGE>
b.
FORBEARANCE.
i. In reliance
upon the representations, warranties and
covenants of the Company contained in this Agreement, and
subject to the terms and conditions of this Agreement and
any documents or instruments executed in connection
herewith, Certain Wealth agrees to forbear from exercising
its rights and remedies under the Transaction Documents or
applicable law in respect of or arising out of the Existing
Defaults, subject to the conditions, amendments and
modifications contained herein for the period (the
"FORBEARANCE Period") commencing on the date hereof and
ending on September 30, 2008, so long as the following
conditions are met: (i) the Company strictly complies with
the terms of this Agreement, and (ii) there is no occurrence
or existence of any Event of Default, other than the
Existing Defaults.
ii. Upon the termin
