Exhibit 10.3

 

Execution Version

 

AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT

 

This AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT AND WAIVER AND CONSENT
(this “Amendment and Waiver”), is made and entered into as of April 23, 2015, by
and among ZAZA ENERGY CORPORATION, a Delaware corporation (the “Company”), and
each of the holders of Securities (as defined in the Securities Purchase
Agreement, as defined below) that is a signatory to this Amendment.

 

RECITALS

 

1.                                      The Company and the holders of the
Securities are parties to that certain Securities Purchase Agreement dated
February 21, 2012, as amended by (a) a letter agreement dated as of March 1,
2012, (b) a letter agreement dated as of March 22, 2012, (c) that certain Waiver
and Amendment No. 1 to Securities Purchase Agreement dated as of June 8, 2012,
as amended by that certain letter agreement dated as of June 28, 2012 (the
“First Amendment”), (d) that certain Waiver and Amendment No. 2 to Securities
Purchase Agreement dated as of July 25, 2012, (e) that certain Waiver and
Amendment No. 3 to Securities Purchase Agreement dated as of October 16, 2012
(the “Third Amendment”), (f) that certain Amendment No. 4 to Securities Purchase
Agreement dated as of December 17, 2012, (g) that certain Amendment No. 5 to
Securities Purchase Agreement and Amendment No. 1 to Sanchez Consent dated as of
March 28, 2013, (h) that certain Amendment No. 6 to Securities Purchase
Agreement dated March 12, 2014, (i) that certain Amendment No. 7 to Securities
Purchase Agreement dated February 24, 2015 and (j) that certain Amendment No. 8
to Securities Purchase Agreement dated April 21, 2015 (as amended, the “Existing
Securities Purchase Agreement”; and as amended by this Amendment and Waiver and
as may be further amended, restated, supplemented or otherwise modified from
time to time, the “Securities Purchase Agreement”).

 

2.                                      Pursuant to the Existing Securities
Purchase Agreement, the Company issued, and the holders of Notes purchased,
(a) the Company’s 8.00% Senior Secured Notes due February 21, 2017, in the
aggregate principal amount of $100,000,000 (the “Notes”) and (b) the Company’s
warrants to purchase 26,315,789 shares (before any adjustments that have been
effected in accordance with the terms thereof) of the Company’s Common Stock
(the “Warrants”).

 

3.                                      The Company is currently party to a term
sheet with Alpha Capital Anstalt (the “Investor”) for the issuance of 2,500
shares of 5% non-voting perpetual convertible preferred stock with a stated
value of $2,500,000 (the “ACA Preferred Stock”) and warrants (the “ACA
Warrants”) to purchase 1,875,000 shares of common stock (the “ACA Financing
Transaction”).

 

4.                                      The $1.00 conversion price and any
potential adjustments thereto, the potential increases to the dividend rate and
the terms of redemption, conflict with the prohibition in Section 7B(2) of the
Securities Purchase Agreement on the issuance of Disqualified Stock.

 

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5.                                      The conversion price and any potential
adjustments thereto, potential increases to the dividend rate, and certain
redemption provisions may conflict with the prohibition in Section 7B(2) of the
Securities Purchase Agreement on the issuance of Disqualified Stock

 

6.                                      Certain terms of the ACA Warrants,
including the exercise price and any potential adjustments thereto and certain
redemption provisions, may conflict with the prohibition in Section 7B(2) of the
Securities Purchase Agreement on the issuance of Disqualified Stock.

 

7.                                      The Company shall be excused from
complying with the terms of any repurchase or redemption obligation applicable
to the ACA Preferred Stock and ACA Warrants which conflict with or may conflict
with the prohibition in Section 7B(2) of the Securities Purchase Agreement on
the issuance of Disqualified Stock for so long as any amounts remain outstanding
under the Senior Secured Notes.

 

8.                                      The Company has requested that the
Required Holders waive and consent to any breach by the Company of the
Securities Purchase Agreement resulting from the issuance of Disqualified Stock
pursuant to the ACA Financing Transaction (the “Consent and Waiver”).

 

9.                                      The Company and the Required Holders
desire to amend the Existing Securities Purchase Agreement to prohibit the
repayment or repurchase of the ACA Preferred Stock and the ACA Warrants for so
long as as any amounts remain outstanding under the Senior Secured Notes (the
“ACA Financing Transaction Amendment”).

 

10.                               The Company and the Required Holders of the
Securities have agreed to make such amendments, subject to the terms and
conditions set forth in this Amendment and Waiver and the Required Holders have
agreed to such Consent and Waiver.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby covenant and agree to
be bound as follows:

 

Section 1.                                          Capitalized Terms. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Securities Purchase Agreement,
unless the context otherwise requires.

 

Section 2.                                          Amendments to Existing
Securities Purchase Agreement.  Subject to the satisfaction of the conditions
precedent set forth in Section 4 hereof, the Existing Securities Purchase
Agreement is hereby amended in the manner specified in Exhibit A hereto.  Such
amendments are referred to herein collectively as the “Amendments”.

 

Section 3.                                          Effectiveness of Waiver and
Consent and Amendment.  The Amendments shall become effective upon satisfaction
of all of the following conditions:

 

(a)                                 Amendment and Waiver.  Execution and
delivery of this Amendment and Waiver by the Company and each of the Required
Holders of the Securities, and

 

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execution and delivery of the Guarantor Acknowledgement attached hereto by the
Guarantors.

 

(b)                                 Representations and Warranties.  The
representations and warranties in Section 5 shall be true and correct in all
respects on the date hereof.

 

(c)                                  ACA Financing Transaction Documents.  Each
of the Required Holders of Securities shall have received copies of the
execution version of the securities purchase agreement with respect to the ACA
Financing Transaction, the form of warrant certificate for the ACA Warrants and
the form of the certificate of designations for the ACA Preferred Stock.

 

(d)                                 Expenses.  The Company shall have paid the
reasonable fees and disbursements of the special counsel of the holders of the
Securities in accordance with Section 10 below and the wire instructions set
forth on Schedule B attached hereto.

 

Section 4.                                          Representations and
Warranties.  To induce the Required Holders of the Securities to enter into this
Amendment and Waiver and to consent to the Amendments, the Company hereby
represents and warrants to each of the holders of Securities that:

 

(a)                                 the execution, delivery and performance of
this Amendment and Waiver have been duly authorized by all requisite corporate
authority or other action on the part of the Company, this Amendment and Waiver
has been duly executed and delivered by the Company, and this Amendment and
Waiver constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms;

 

(b)                                 each of the representations and warranties
set forth in the Securities Purchase Agreement and the other Transaction
Documents are true and correct in all material respects as of the date hereof,
except (i) to the extent that such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects as of such earlier
date), (ii) that the financial statements referred to in Paragraph 9C shall be
deemed to refer to the financial statements most recently delivered by the
Company pursuant to Paragraph 6A(i) or 6A(ii), and (iii) as disclosed in the
First Amendment or the Third Amendment;

 

(c)                                  no Default or Event of Default has occurred
and is continuing as of the date hereof;

 

(d)                                 no events have taken place and no
circumstances exist at the date hereof which would give any Credit Party a basis
to assert a defense, offset or counterclaim to any claim of any holder of a
Security with respect to the obligations of the Credit Parties;

 

(e)                                  the description of the the ACA Preferred
Stock and the ACA Warrants contained in recitals 4, 5 and 6 is a true, correct
and complete description of the terms of the ACA Preferred Stock and ACA
Warrants which conflict with or may conflict with the prohibition in
Section 7B(2) of the Securities Purchase Agreement on the issuance of
Disqualified Stock; and

 

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(f)                                   the Company shall be excused from
complying with the terms of any repurchase or redemption obligation applicable
to the ACA Preferred Stock and ACA Warrants which conflict with or may conflict
with the prohibition in Section 7B(2) of the Securities Purchase Agreement on
the issuance of Disqualified Stock for so long as any amounts remain outstanding
under the Senior Secured Notes.

 

Section 5.                                          Waiver and Consent.  Subject
to the satisfaction of the applicable conditions specified in Section 3 and
conditioned upon the accuracy of the representations and warranties contained
herein, the Required Holders hereby waive the application of the definition of
Disqualified Stock and any other restrictive covenants under the Securities
Purchase Agreement to the ACA Financing Transaction and consent in all respects
to the ACA Financing Transaction.

 

Section 6.                                          Transaction Document.  This
Amendment and Waiver shall be deemed to constitute a Transaction Document for
all purposes under the Securities Purchase Agreement.

 

Section 7.                                          Effect of Amendment and
Waiver.  Except as set forth expressly herein, all terms of the Securities
Purchase Agreement shall be and remain in full force and effect. The execution,
delivery and effectiveness of this Amendment and Waiver shall not operate as a
waiver of any right, power or remedy of the holders of Notes under the
Securities Purchase Agreement, nor constitute a waiver of any provision of the
Securities Purchase Agreement, except as expressly provided herein. Any and all
notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this Amendment and Waiver may refer to the
Securities Purchase Agreement without making specific reference to this
Amendment and Waiver, but nevertheless all such references shall include this
Amendment and Waiver unless the context otherwise requires.

 

Section 8.                                          Release.

 

(a)                                 In consideration of the agreements of the
holders of Securities contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, each
Credit Party, on behalf of itself and its successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably releases,
remises and forever discharges each holder of Securities, and its successors and
assigns, and its present and former shareholders, partners, members, managers,
consultants, affiliates, subsidiaries, divisions, predecessors, directors,
officers, attorneys, employees, agents and other representatives, and all
persons acting by, through, under or in concert with any of them (each holder of
Securities and all such other Persons being hereinafter referred to collectively
as the “Releasees” and individually as a “Releasee”) of and from all demands,
actions, causes of action, suits, covenants, contracts, controversies,
agreements, promises, sums of money, accounts, bills, reckonings, damages and
any and all other claims, counterclaims, defenses, recoupment, rights of setoff,
demands and liabilities whatsoever (individually, a “Claim” and collectively,
“Claims”) of every name and nature, known or unknown, contingent or mature,
suspected or unsuspected, both at law and in equity, which any Credit Party or
any of its respective successors, assigns, or other legal representatives may
now or hereafter own, hold, have or claim to have against the Releasees or any
of them for, upon, or by reason

 

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of any circumstance, action, cause or thing whatsoever which arises at any time
on or prior to the day and date of this Amendment and Waiver, including, without
limitation, for or on account of, or in relation to, or in any way in connection
with the Securities Purchase Agreement, or any of the other Transaction
Documents or transactions thereunder or related thereto.

 

(b)                                 Each Credit Party understands, acknowledges
and agrees that the release set forth above may be pleaded as a full and
complete defense and may be used as a basis for an injunction against any
action, suit or other proceeding which may be instituted, prosecuted or
attempted in breach of the provisions of such release.

 

(c)                                  Each Credit Party agrees that no fact,
event, circumstance, evidence or transaction which could now be asserted or
which may hereafter be discovered shall affect in any manner the final, absolute
and unconditional nature of the release set forth above.

 

(d)                                 In entering into this Amendment and Waiver,
each Credit Party has consulted with, and has been represented by, legal counsel
and expressly disclaims any reliance on any representations, acts or omissions
by any of the Releasees and hereby agrees and acknowledges that the validity and
effectiveness of the release set forth above does not depend in any way on any
such representations, acts and/or omissions or the accuracy, completeness or
validity hereof. The provisions of this Section 9 shall survive the termination
of this Amendment and Waiver and the other Transaction Documents and the payment
in full of the Notes.

 

(e)                                  Each Credit Party acknowledges and agrees
that the release set forth above may not be changed, amended, waived, discharged
or terminated orally.

 

Section 9.                                          Fees and Expenses;
Indemnification.  Whether or not the Amendments becomes effective, the Company
agrees to pay on demand all reasonable costs and expenses of the holders of the
Securities (including the reasonable fees and expenses of the special counsel of
the holders of the Securities) in connection with the preparation, negotiation,
execution and delivery of this Amendment and Waiver as provided in Paragraph
13B(1) of the Securities Purchase Agreement. Nothing in this Section 10 shall
limit the Company’s obligations pursuant to Paragraphs 13B(1) and 13B(2) of the
Securities Purchase Agreement.

 

Section 10.                                   Governing Law.  THIS AMENDMENT AND
WAIVER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAWS OF SUCH STATE THAT WOULD PERMIT
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

 

Section 11.                                   Severability.  Whenever possible,
each provision of this Amendment and Waiver and any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto
shall be interpreted in such manner as to be effective, valid and enforceable
under the applicable law of any jurisdiction, but, if any provision of this
Amendment

 

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and Waiver or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto shall be held to be prohibited, invalid
or unenforceable under the applicable law, such provision shall be ineffective
in such jurisdiction only to the extent of such prohibition, invalidity or
unenforceability, without invalidating or rendering unenforceable the remainder
of such provision or the remaining provisions of this Amendment and Waiver or
any other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto in such jurisdiction, or affecting the effectiveness,
validity or enforceability of such provision in any other jurisdiction.

 

Section 12.                                   Counterparts.  This Amendment and
Waiver may be executed by one or more of the parties hereto in any number of
separate counterparts, each of which shall be deemed an original and all of
which, taken together, shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment and Waiver by
facsimile transmission or by electronic mail in pdf form shall be as effective
as delivery of a manually executed counterpart hereof.

 

Section 13.                                   Binding Nature.  This Amendment
and Waiver shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

 

Section 14.                                   Entire Understanding.  The
Existing Securities Purchase Agreement, together with this Amendment and Waiver,
set forth the entire understanding of the parties with respect to the matters
set forth herein, and shall supersede any prior negotiations or agreements,
whether written or oral, with respect thereto.

 

Section 15.                                   Headings.  The headings of the
sections of this Amendment and Waiver are inserted for convenience only and
shall not be deemed to constitute a part of this Amendment and Waiver.

 

Section 16.                                   Time is of the Essence.  Time is
of the essence of this Amendment and Waiver.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver to
be executed as of the date and year first above written.

 

 

 

ZAZA ENERGY CORPORATION

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

[AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT]

 

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MSDC ZEC INVESTMENTS, LLC

 

 

 

 

By:

/s/ Marcello Liguori

 

Name:

Marcello Liguori

 

Title:

Vice President

 

[AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT]

 

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SENATOR SIDECAR MASTER FUND LP

 

 

 

By:

Senator Investment Group LP,

 

 

its investment manager

 

 

 

 

 

By:

/s/ Evan Gartenlaub

 

Name:

Evan Gartenlaub

 

Title:

General Counsel and

 

 

Chief Compliance Officer

 

[AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT]

 

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GUARANTOR ACKNOWLEDGEMENT

 

Each of the undersigned hereby acknowledges and agrees to the terms of the
Amendment No. 9 to Securities Purchase Agreement, dated as of April 23, 2015
(the “Amendment and Waiver”), including, without limitation, Section 9 of the
Amendment and Waiver, amending that certain Securities Purchase Agreement, dated
February 21, 2012, as amended (as amended, the “Securities Purchase Agreement”),
among ZaZa Energy Corporation, a Delaware corporation, and the holders of
Securities party thereto. Each of the undersigned hereby confirms that the
Guaranty Agreement to which the undersigned are a party remains in full force
and effect after giving effect to the Amendment and Waiver and continues to be
the valid and binding obligation of each of the undersigned, enforceable against
each of the undersigned in accordance with its terms.

 

Capitalized terms used herein but not defined are used as defined in the
Securities Purchase Agreement.

 

Dated as of April 23, 2015.

 

 

ZAZA HOLDINGS, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

ZAZA ENERGY, LLC,

 

a Texas limited liability company

 

 

 

 

 

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

TOREADOR RESOURCES CORPORATION,

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

[AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT]

 

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ZAZA ENERGY DEVELOPMENT, LLC,

 

a Texas limited liability company

 

 

 

 

 

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

ZAZA PETROLEUM MANAGEMENT, LLC, a
Texas limited liability company

 

 

 

 

 

 

 

 

 

By:

/s/

 Todd A. Brooks

 

 

Name:

 Todd A. Brooks

 

 

Title:

 President and Chief Executive Officer

 

[AMENDMENT NO. 9 TO SECURITIES PURCHASE AGREEMENT]

 

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Exhibit A

 

(a)                                 Section 7 — Negative Covenants.  Section 7
of the Existing Securities Purchase Agreement is hereby amended by inserting the
new Paragraph 7K at the end of such Section 7 as follows:

 

“‘7K Prepayments, Etc. of ACA Preferred Stock and ACA Warrants.  The Company
covenants that it will not, and will not permit any of its Subsidiaries to
directly or indirectly repay, prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner, or make any
distribution of securities or other property or assets in respect of, the ACA
Preferred Stock or ACA Warrants for so long as the Notes are outstanding.”

 

(i)                                     Paragraph 12B - Other Terms.  Paragraph
12B of the Existing Securities Purchase Agreement is hereby amended to insert
the following definitions in their proper alphabetical order to read as follows:

 

“‘ACA Convertible Preferred Shares’ shall mean the 2,500 shares of 5%
convertible preferred stock issued to Alpha Capital Anstalt and other investors
with an aggregate stated value of $2,500,000 pursuant to that Securities
Purchase Agreement, dated April 23, 2015, by and between the Company and the
investors named therein.

 

‘ACA Warrants’ shall mean warrants exercisable for 1,875,000 shares of common
stock issued to Alpha Capital Anstalt and other investors pursuant to that
Securities Purchase Agreement, dated April 23, 2015, by and between the Company
and the investors named therein.”

 

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