Document:

ex10-1.htm

    KINZER
TECHNOLOGY

    Richmond,
Virginia 23233

    

    

    March 25,
2008

    

     

    Mr. Scott
Oglum

    Chief
Executive Officer

    Theater
Xtreme Entertainment Group, Inc.

    250
Corporate Blvd Suite E&F

    Newark,
DE  19702

    

    

    
      	 
      	
              RE:

            	
              Kinzer Technology LLC (“Kinzer”) w. Theater Xtreme
      Entertainment Group, Inc. (“Theater Xtreme”) March 2007 $2,700,000
      Debenture (“Debenture”)

            
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    Dear
Scott:

    

    Per your
request, this letter shall serve as Kinzer’s agreement that Theater Xtreme be
permitted to defer that interest payment due on April 1, 2008 under the
Debenture (and as required in our letter of October 2, 2007) to July 1, 2008.
Theater Xtreme shall be required to make its regular interest payment due as of
such date as well as the Deferred Interest Payments as set forth in the letter
of October 2, 2007 and the interest payment deferred hereby due April 1, 2008
(which shall bring current all installment payments of interest).

    

    Please
countersign below to acknowledge our mutual agreement and return to
me.

    

    
      	 
      	
              Sincerely,

            
	 
      	 
      
	 
      	
              /s/
      Philip J. Dunn

            
	 
      	 
      
	 
      	
              Philip
      J. Dunn

            
	 
      	
              Vice
      President and Treasurer

            

    

    

    

    Acknowledged
and Agreed

    

    

    

    
      	
              BY:

            	
              /s/ Scott
      Oglum

            	
              Date:
      March 31, 2008

            
	 
      	
              Scott
      Oglum

            	 
      
	 
      	
              Chief
      Executive Officer

            	 
      
	 
      	
              Theater
      Xtreme Entertainment Group, Inc.ex10_1.htm

     

    Exhibit 10.1

     

    

    201
St. Charles Avenue

    Suite
3400

    
      New
Orleans, Louisiana 70170 

        
          

        

      

    

     

    April 1,
2008

     

    Carlson
Capital, L.P.

    Asgard
Investment Corp.

    Clint D.
Carlson

    Double
Black Diamond Offshore LDC

    James R.
Latimer, III

    Bryant H.
Patton

    Steven J.
Pully

    c/o
Carlson Capital, L.P.

    2100
McKinney Avenue

    Suite
1600

    Dallas,
Texas  75201

    Attention:  Steven
J. Pully

     

    Ladies
and Gentlemen:

     

    This
letter memorializes your and our mutual understanding and agreements regarding
the nomination by Energy Partners, Ltd., a Delaware corporation (the “Company”), of James
R. Latimer, III (“Mr.
Latimer”), Bryant H. Patton (“Mr. Patton”) and
Steven J. Pully (“Mr.
Pully”, and together with Mr. Latimer and Mr. Patton, the “Nominees”) for
election as directors of the Company’s Board of Directors (the “Board”) at the
Company’s 2008 Annual Meeting of Stockholders (“2008 Annual
Meeting”).

     

    The
parties hereto agree as follows:

     

    
      	
              Section
      1.1  

            	
              Company
      Agreements.

            

    

     

    (a) The
Company agrees to include the Nominees on the Board’s proposed slate of eleven
director nominees for election at the 2008 Annual Meeting (the “2008 Board
Slate”).  Prior to the 2008 Annual Meeting, (i) the Board shall
appoint the Nominees immediately after the execution of this letter agreement,
as members of the Board; (ii) the Board shall recommend (and shall not change
such recommendation in a manner adverse to the Nominees unless required to do so
by the Board’s fiduciary duties) that the Company’s stockholders vote in favor
of the 2008 Board Slate (including the Nominees) and (iii) the Company
shall solicit proxies for the election of the 2008 Board Slate of nominees
(including the Nominees) at the 2008 Annual Meeting.  Assuming that
each of the Nominees is elected, the Board shall appoint the Nominees to such
committees as it deems appropriate and such appointments shall be
consistent

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    in number
with the committee appointments that have been made with regard to the current
members of the Board.

     

    (b) The
Company agrees that each Nominee, if elected, shall receive (i) the same
benefits of director and officer insurance, and any indemnity and exculpation
arrangements available generally to the outside directors on the Board and (ii)
the same compensation for his service as a director as the compensation received
by other outside directors on the Board.

     

    (c) The
Company agrees that, subject to Section 1.3(b), until the Notice Date (as
defined below), Mr. Pully may be replaced by another designee of Carlson
Capital, L.P. and its affiliates who is reasonably acceptable to the Board of
Directors in the event that such Nominee dies or is unable to perform his duties
as a director.  The Company also agrees that, in the event the Board
changes its recommendation with respect to any of the Nominees as a result of
the exercise of its fiduciary duties, such Nominee may be replaced by another
designee of Carlson Capital, L.P. and its affiliates who is reasonably
acceptable to the Board of Directors (such individual being a “Replacement
Nominee”).  Under such circumstances, the Board shall take
whatever actions are necessary to ensure that said Replacement Nominee is
elected at the 2008 annual meeting of shareholders, including but not limited to
the recirculation of the Company’s proxy statement to include such Replacement
Nominee as a Company nominee, delaying the date of the 2008 annual meeting of
shareholders to accommodate the selection and nomination of such Replacement
Nominee and supporting such Replacement Nominee’s election in any such
re-circulated proxy statement.

     

    (d) The
Company agrees that it will not, prior to the date that is 10 calendar days
prior to the expiration of the notice period contained in Section 2.10 of the
Company’s amended and restated bylaws regarding any Stockholder Matters (as
defined below) to be brought before the 2009 annual meeting of stockholders (the
“Notice Date”),
(i) increase the size of the Board to more than eleven directors; or (ii) amend
its By-laws regarding the nomination of directors at the 2009 annual meeting of
stockholders.

     

    
      	
              Section
      1.2  

            	
              Holders’
      Agreements.

            

    

     

    (a) The
Holders (as defined below) have represented to the Company that Carlson Capital,
L.P., a Delaware limited partnership (“Carlson Capital”),
Asgard Investment Corp., a Delaware corporation (“Asgard”), Clint D.
Carlson, an individual (“Mr. Carlson”), Double
Black Diamond Offshore LDC, a Cayman Islands company (“Offshore”, and
together with Carlson Capital, Asgard and Mr. Carlson, the “Holders”) together
hold, as of the date hereof, sole voting power with respect to at least
2,994,968 shares (the “Voting Shares”) of
Company common stock, and the Company has relied upon this
representation.

     

    (b) The
Holders agree (i) to retain sole voting rights to all of the Voting Shares
through the 2008 Annual Meeting, (ii) to cause all Voting Shares to be present
at the 2008 Annual Meeting for purposes of establishing a quorum and (iii) to
cause all shares of Company common stock owned by them, including the Voting
Shares, to be voted at the 2008 Annual Meeting (x) for all of the 2008 Board
Slate and (y) as the Holders determine is appropriate on all other
proposals.

     

    
      
         

      

      
        -2- 

        
          

        

      

      
         

      

    

    

     

    (c) During
the period commencing with the execution of this Agreement and ending on the
earlier to occur of (x) the date that is ten (10) calendar days prior to the
Notice Date (provided, however, that if the Company’s Board takes any action to
amend the Company’s amended and restated bylaws in such a manner as to increase
the time period prior to the 2009 annual meeting of stockholders by which a
holder of the Company’s Common Stock must provide timely notice to the Company
of (i) its nomination of a person or persons to the Board at a meeting of the
Company’s stockholders, (ii) or of its proposal to bring business before a
meeting of the Company’s stockholders (clause (i) and (ii) together, the “Stockholder
Matters”), then the Standstill Period (as defined herein) shall expire
ten (10) days prior to the date on which a stockholder must give notice to the
Company with respect to any Stockholder Matters), and (y) a material breach by
the Company of its obligations under this letter agreement (the “Standstill Period”),
neither Carlson Capital nor any of its Affiliates (as defined below) nor the
Nominees shall, directly or indirectly, other than as expressly provided by this
letter agreement and other than in a manner consistent with the recommendations
of the Board to the Company’s stockholders, (i) solicit proxies or consents for
the voting of any voting or other securities of the Company or otherwise become
a “participant,” directly or indirectly, in any “solicitation” of “proxies” or
consents to vote, or become a “participant” in any “election contest” involving
the Company or the Company’s securities (all terms used herein and defined in
Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) having
the meanings assigned to them therein), (ii) seek to advise or influence any
person with respect to the voting of any securities of the Company, (iii)
initiate, propose or otherwise “solicit” the Company stockholders for the
approval of shareholder proposals, (iv) otherwise communicate with the Company’s
stockholders or others pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act,
(v) otherwise engage in any course of conduct, other than in the Nominees’
capacity as directors of the Company with the Board and Company management, with
the purpose of causing stockholders of the Company to vote contrary to the
recommendation of the Board on any matter presented to the Company’s
stockholders for their vote or challenging the policies of the Company;
provided, however, that the foregoing sections (i) through (v) shall not
prohibit the Holders from (x) making public statements (including statements
contemplated by Rule 14a-1(l)(2)(iv) under the Exchange Act), or (y) engaging in
discussions with other stockholders (so long as the Holders do not seek directly
or indirectly, either on their own or another’s behalf, the power to act as
proxy for a security holder and do not furnish or otherwise request, or act on
behalf of a person who furnishes or requests, a form of revocation, abstention,
consent or authorization), in each case with respect to any matter being
presented to the Company’s stockholders for their vote; provided further,
however, that notwithstanding anything to the contrary contained herein, this
letter agreement shall not prohibit the Holders from making statements of any
kind in the event such statement is made in response to any negative or
disparaging statements made by the Company with respect to the Holders or the
Nominees; or (vi) request this letter agreement be amended or otherwise
changed.  “Affiliate” means,
with respect to Carlson Capital, any person that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, Carlson Capital, including without limitation the Holders, and any
employees, officers and partners of Carlson Capital.

     

    (d) Carlson
Capital shall promptly notify the Company of any sale, transfer or other
disposition of securities of the Company that causes the aggregate economic or
voting

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    ownership
of the Holders to be less than five percent (5%) of the number of shares of
Common Stock outstanding as of the date hereof.

     

    
      	
              Section
      1.3  

            	
              Nominee
      Agreements.

            

    

     

    (a) Each
Nominee agrees to provide to the Company, without unreasonable delay, true and
complete information regarding such Nominee required by law to be included in
the Company’s proxy materials relating to the 2008 Annual Meeting.

     

    (b) Mr. Pully
hereby irrevocably resigns as a director of the Company, effective immediately
upon adoption of a resolution of the Board (adopted by a majority of the
directors who are not Nominees), which resolution is adopted on or following the
first date on which the Holders’ aggregate economic or voting ownership of the
Company’s Common Stock is reduced to less than five percent (5%) of the number
of shares of Common Stock outstanding as of the date hereof.  The
parties hereto agree and acknowledge that no additional agreement, notice or
action on the part of Mr. Pully shall be necessary for the validity and
effectiveness of such resignations.

     

    
      	
              Section
      1.4  

            	
              General.

            

    

     

    (a) Each of
the parties hereto represents and warrants to the other parties that this letter
agreement has been duly and validly authorized, executed and delivered by such
party and constitutes the valid and binding obligation of such party enforceable
against such party in accordance with their respective terms.

     

    (b) Promptly
following the execution of this letter agreement, the Company and the Holders
shall jointly issue the press release attached hereto as Exhibit A.

     

    (c) The
Company shall reimburse the Holders, or their designee(s), for all reasonable
costs and expenses incurred in connection with this letter agreement or the
potential nomination of directors by the Holders in connection with the 2008
Annual Meeting (including all reasonable legal fees and disbursements in
connection therewith).

     

    (d) This
letter agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and the respective successors.  No
party may assign any of its rights or obligations under this letter agreement to
any other person.  This letter agreement contains the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersedes all prior and contemplated arrangements and understandings with
respect thereto.  This letter agreement may be signed in counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.  All notices and other
communications required or permitted hereunder shall be effective upon receipt
and shall be in writing and may be delivered in person, by facsimile, electronic
mail, express delivery service or U.S. mail, in which event it may be mailed by
first-class, certified or registered, postage prepaid, addressed to the party to
be notified at the addresses which may be designated in writing.  Each
party hereto shall do and perform or cause to be done and performed all such
further acts and things and shall execute and deliver all such other agreements,
certificates, instruments and documents as any other party hereto reasonably may
request in order to carry out the intent

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    and
accomplish the purposes of this agreement and the consummation of the
transactions contemplated hereby.

     

    (e) If at any
time subsequent to the date hereof, any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this
Agreement.

     

    (f) This
letter agreement and the legal relations hereunder between the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to contracts made and performed therein, without giving
effect to the principles of conflicts of law thereof.  Each of the
parties hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware and of the United
States of America, in each case located in the County of New Castle, for any
action, proceeding or investigation in any court or before any governmental
authority arising out of or relating to this letter agreement and the
transactions contemplated hereby (and agrees not to commence any action,
proceeding or investigation relating thereto except in such courts), and further
agrees that service of any process, summons, notice or document by registered
mail to the respective address set forth on the first page hereof shall be
effective service of process for any action, proceeding or investigation brought
against it in any such court.

     

    (g) It is
hereby agreed and acknowledged that it will be impossible to measure in money
the damages that would be suffered if the parties fail to comply with any of the
obligations herein imposed on them and that in the event of any such failure, an
aggrieved person will be irreparably damaged and will not have an adequate
remedy at law.  Any such person, therefore, shall be entitled to
injunctive relief, including specific performance, to enforce such obligations,
without the posting of any bond, and, if any action should be brought in equity
to enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.

     

    [Signature
pages follow]

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    If the
foregoing represents our mutual understanding and agreements please execute this
letter agreement below and it shall become effective as of the day and year
first written above.

     

    
 

    
      	
              ENERGY
      PARTNERS, LTD.

            
	
               

               

              By:      
       /s/
      Richard A. Bachmann        

              Name:  Richard
      A. Bachmann

              Title:  
       Chairman and Chief Executive

                          
      Officer

            

    

     

     

    

    
      	
              DOUBLE
      BLACK DIAMOND OFFSHORE LDC

               

              By:  Carlson
      Capital, L.P., its investment manager

               

              By:  Asgard
      Investment Corp., its general partner

               

                     
      By:        /s/ Clint D.
      Carlson        

                      Name:  Clint
      D. Carlson

                     
      Title:    President

               

            	
              For
      purposes of paragraph 3 hereof only:

               

              /s/ James R. Latimer,
      III        

              James
      R. Latimer, III

               

              For
      purposes of paragraph 3 hereof only:

               

              /s/ Bryant H.
      Patton        

              Bryant
      H. Patton

               

              For
      purposes of paragraph 3 hereof only:

               

              /s/ Steven J.
      Pully        

              Steven
      J. Pully

               

            
	
              CARLSON
      CAPITAL, L.P.

              By:  Asgard
      Investment Corp., its general partner

                     
      By:       /s/ Clint D.
      Carlson        

                     
      Name:  Clint D. Carlson

                     
      Title:    President

               

            	
               

              /s/ Clint D.
      Carlson        

              Clint
      D. Carlson

            
	
              ASGARD
      INVESTMENT CORP.

              By:      
       /s/ Clint
      D. Carlson        

              Name:  Clint
      D. Carlson

              Title:   
      President

               

            	 
      

    

    

     

     

    [LETTER
AGREEMENT SIGNATURE PAGE]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    Energy
Partners Appoints Three New Directors and 
Announces Slate for 2008 Annual
Meeting

     

    New Orleans, Louisiana, April 1,
2008...Energy Partners, Ltd. (“EPL” or the “Company”) (NYSE:EPL) today
announced that it has entered into an agreement with Carlson Capital, L.P.,
pursuant to which three new directors – James R. Latimer III, Bryant H. Patton,
and Steven J. Pully – have been appointed to the Board, effective immediately.
These new directors were recommended by Carlson Capital, which together with its
affiliates owns approximately 9.4% of the Company’s outstanding
shares.

    

    Additionally
the EPL Board nominated to stand for re-election at the Company’s 2008 Annual
Meeting of Stockholders on May 29, 2008 a slate of 11 members of the Board,
including the three new members and Richard A. Bachmann, John C. Bumgarner, Jr.,
Jerry D. Carlisle, Harold D. Carter, Enoch L. Dawkins, Dr. Norman C. Francis,
Robert D. Gershen, and William R. Herrin, Jr.  Carlson Capital and its
affiliates have agreed to vote their shares in favor of all of the Company’s
nominees at the Annual Meeting.

    

    Richard
A. Bachmann, EPL’s Chairman and CEO, commented, “Adding three more
highly-qualified and experienced Board members is consistent with our commitment
both to good corporate governance and to building shareholder
value.  With its substantial investment in Energy Partners, Carlson
Capital has demonstrated confidence in the Company and its prospects for future
success. We look forward to working closely with the new directors as we
implement our strategic plan, and are grateful for the service and many
contributions to EPL of our three directors who are not standing for
re-election. One of those directors, John Phillips, will be named a director
emeritus upon the completion of his current term.”

    

    Clint D.
Carlson, President of Carlson Capital, said, “We are pleased to be working
constructively with EPL. We are confident that the new directors will represent
the interests of all EPL shareholders and we look forward to working with
EPL’s  Board and management to increase shareholder
value.”

    

    James
R. Latimer, III

    Mr.
Latimer is head of The Latimer Companies, a private oil and gas exploration and
development company.  He is also a founder and partner of Blackhill
Partners/Blackhill Advisors, a financial advisory and merchant banking firm,
primarily in energy and technology industries. Mr. Latimer currently serves as a
director of Enron Creditors Recovery Corporation (formerly Enron Corp.) and NGP
Capital Resources Company, and is formerly a director of Magnum Hunter
Resources, Inc., Prize Energy Corp., and Falcon Drilling, Inc. Mr. Latimer’s
prior business experience includes work as a management consultant with McKinsey
& Company and serving as co-head of the Dallas regional office of Prudential
Capital.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    

    

    

    Bryant
H. Patton

    Mr.
Patton is the President of BRYCAP Investments, Inc., a merchant banking firm
specializing in energy related companies that he founded in 1989.  In
2000, he also co-founded Camden Resources, Inc., a private oil and gas
exploration and production company, and served as executive vice president until
the company was acquired at the end of 2007.  Prior to founding Camden
Resources, Inc. and BRYCAP Investments, Inc., Mr. Patton served as
senior vice president of Associated Energy Managers, an investment fund manager
of institutional investments in independent oil and gas companies. Mr. Patton
also is a director of Abraxas Energy Partners, L.P. and has served as a director
of a number of private oil and gas companies. Mr. Patton has almost thirty
years of experience in the energy industry, having started his career in the
energy industry in 1977 with his family oil and gas company,
TTE, Inc.

    

    Steven
J. Pully

    Mr. Pully is a consultant
in the asset management industry and acts as a consultant to Carlson Capital,
L.P.  From December 2001 to October 2007, Mr. Pully worked
for Newcastle Capital
Management, L.P., an investment partnership, where he served as President from
January 2003 through October 2007.   He served as Chief Executive
Officer of New Century Equity Holdings Corp. from June 2004 through October 2007
and is a director of that company.  Mr. Pully is also a director of
Peerless Systems Corp.  Prior to joining Newcastle Capital
Management, he served as a managing
director in the investment banking department of Banc of America Securities,
Inc. and was a senior managing director in the investment banking department of Bear Stearns & Co. Inc.
Mr. Pully’s primary focus as an investment banker
was on the energy sector.  Mr. Pully is licensed as an attorney and
CPA in the state of Texas and is also a CFA
charterholder.

    

    About
EPL

    

    Founded
in 1998, EPL is an independent oil and natural gas exploration and production
company based in New Orleans, Louisiana. The Company’s operations are focused
along the U.S. Gulf Coast, both onshore in south Louisiana and offshore in the
Gulf of Mexico.

    

    About
Carlson Capital

    

    Founded
in 1993, Carlson Capital serves as the investment advisor of the Black Diamond
group of hedge funds.  It employs a multi-strategy, non-directional
approach in the global equity and debt markets.  Based in Dallas, Carlson
Capital has over ninety employees and offices in New York, London, and
Greenwich, Connecticut. 

    

    

    Forward-Looking
Statements

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    

     

    This
press release may contain forward-looking information and statements regarding
EPL. Any statements included in this press release that address activities,
events or developments that EPL expects, believes or anticipates will or may
occur in the future are forward-looking statements. These include statements
regarding:

     

     

    
      	
              ·  

            	
              reserve
      and production estimates;

            

    

     

     

    
      	
              ·  

            	
              oil
      and natural gas prices;

            

    

     

     

    
      	
              ·  

            	
              the
      impact of derivative positions;

            

    

     

     

    
      	
              ·  

            	
              production
      expense estimates;

            

    

     

     

    
      	
              ·  

            	
              cash
      flow estimates;

            

    

     

     

    
      	
              ·  

            	
              future
      financial performance;

            

    

     

     

    
      	
              ·  

            	
              planned
      capital expenditures; and

            

    

     

     

    
      	
              ·  

            	
              other
      matters that are discussed in EPL’s filings with the Securities and
      Exchange Commission.

            

    

     

     

    These
statements are based on current expectations and projections about future events
and involve known and unknown risks, uncertainties, and other factors that may
cause actual results and performance to be materially different from any future
results or performance expressed or implied by these forward-looking statements.
Please refer to EPL’s filings with the SEC, including its Form 10-K for the year
ended December 31, 2007, for a discussion of these risks.

     

     

    Additional
Information and Where to Find It. Security holders may obtain information
regarding the Company from EPL’s website at www.eplweb.com, from the Securities
and Exchange Commission’s website at www.sec.gov, or by directing a request to:
Energy Partners, Ltd. 201 St. Charles Avenue, Suite 3400, New Orleans, Louisiana
70170, Attn: Secretary, (504) 569-1875.

     

    Contact:

    For
Energy Partners, Ltd.

    T.J.
Thom, 504-799-4830

    or

    Al
Petrie, 504-799-1953

    

    Media:

    Joele
Frank, Wilkinson Brimmer Katcher

    Steve
Frankel or Jeremy Jacobs, 212-355-4449

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    

    

    For
Carlson Capital, L.P.

    Perry
Street Communications

    Jon
Morgan, 212-741-0014

    

    ###

     

     

     

     

     

     

     

     

     

     

    A-4

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