Preview | Securities Purchase Agreement |

Securities Purchase Agreement

SECURITIES PURCHASE AGREEMENT

dated as of June 26, 2002

GREKA ENERGY CORPORATION, as BORROWER

THE OTHER ENTITIES PARTY HERETO, as GUARANTORS

THE PURCHASERS PARTY HERETO

GUGGENHEIM INVESTMENT MANAGEMENT, LLC, as COLLATERAL AGENT

SECURITIES PURCHASE AGREEMENT

Section		Page
1	DEFINITIONS	1

2.	PURCHASE OF SECURITIES	19

	2.1 Purchase of Securities	19

	2.2 Closings	20

	2.3 Optional Prepayment	20

	2.4 Excess Cash Flow	20

	2.5 Annual Fees	21

	2.6 Collateral Monitoring Fee	21

	2.7 Repayment of Notes	21

	2.8 Use of Proceeds	21

	2.9 Interest on Notes	21

	2.10 Receipt of Payments	22

	2.11 Application of Payments	22

	2.12 Sharing of Payments	23

	2.13 Access	23

	2.14 Taxes	24

	2.15 Original Issue Discount	25

3.	CREATION OF SECURITY INTEREST	25

	3.1 Security Interest	25

	3.2 Representations Concerning the Collateral	25

	3.3 Covenants Concerning the Collateral	26

	3.4 Collection and Maintenance of Collateral and Records	26

	3.5 Delivery of Additional Documentation Required	27

	3.6 Power of Attorney	27

	3.7 Code and Other Remedies	28

	3.8 Deficiency	29

	3.9 Lien Priority and Subordination	29

4.	PURCHASERS REPRESENTATIONS AND WARRANTIES	29

	4.1 Investment Intention	29

	4.2 Accredited Investor	30

TABLE OF CONTENTS

SECURITIES PURCHASE AGREEMENT(Continued)

TABLE OF CONTENTS

SECURITIES PURCHASE AGREEMENT(Continued)

Section		Page

	5.27 Refunds	41

	5.28 Minute Books	41

	5.29 Full Disclosure	41

6.	COVENANTS	41

	6.1 Affirmative Covenants	41

	(a) Books and Records	41

	(b) Financial Statements, Reports, Certificates	41

	(c) Communications with Accountants	42

	(d) Maintenance of Existence, Conduct of Business and Operation of Properties	42

	(e) Taxes	43

	(f) Insurance	43

	(g) Location of Inventory and Equipment	45

	(h) Compliance with Laws	45

	(i) Leases	45

	(j) Environmental	45

	(k) Transfer or Division Orders	46

	(l) Disclosure Updates	47

	(m) Board Observer	47

	(n) Notices	47

	(o) Employee Plans	48

	(p) Roll Forward Reserve Reports	49

	(q) Greka AM, Inc. and Calox, Inc.	49

	(r) Dissolution of Subsidiaries	49

	6.2 Negative and Financial Covenants	49

	(a) Indebtedness	49

	(b) Liens	50

	(c) Sales of Assets; Liquidation	50

	(d) Mergers and Subsidiaries	50

	(e) Change Name	50

TABLE OF CONTENTS

SECURITIES PURCHASE AGREEMENT(Continued)

Section		Page

	(f) Guarantee	51

	(g) Nature of Business	51

	(h) Prepayments	51

	(i) Payments on Vintage Note	51

	(j) Change of Control	51

	(k) Consignments	51

	(l) Distributions	51

	(m) Accounting Methods	52

	(n) Investments	52

	(o) Transactions with Affiliates	52

	(p) Suspension	52

	(q) Loans and Advances	52

	(r) Change in Location of Chief Executive Office; Inventory and Equipment with Bailees	52

	(s) Receivables	53

	(t) Financial Covenants	53

	(u) Capital Expenditures.	54

	(v) Management Compensation	54

	(w) Amendments to Certificate of Incorporation and By-Laws	54

7.	CONDITIONS PRECEDENT	54

	7.1 Conditions Precedent	54

	7.2 Additional Conditions	55

8.	EVENTS OF DEFAULT; RIGHTS AND REMEDIES	56

	8.1 Events of Default	56

	8.2 Remedies	58

	8.3 Waivers by the Credit Parties

End of Preview

Section		Page

	4.3 Restricted Securities	30

	4.4 Existence	30

	4.5 Power; Authorization; Enforceable Obligations	30

5.	CREDIT PARTIES REPRESENTATIONS AND WARRANTIES	30

	5.1 Authorized and Outstanding Shares of Capital Stock	30

	5.2 Authorization and Issuance of the Securities	31

	5.3 Securities Laws	31

	5.4 Corporate Existence	31

	5.5 Subsidiaries	32

	5.6 Corporate Power; Authorization; Enforceable Obligations	32

	5.7 Financial Statements	32

	5.8 Ownership of Property	33

	5.9 Material Contracts; Indebtedness	34

	5.10 Environmental Protection	34

	5.11 Labor Matters	35

	5.12 Other Ventures	36

	5.13 Taxes	36

	5.14 No Litigation	36

	5.15 Brokers	36

	5.16 Employment Agreements	37

	5.17 Patents, Trademarks, Copyrights and Licenses	37

	5.18 No Material Adverse Effect	37

	5.19 ERISA	37

	5.20 SEC Documents	39

	5.21 Ordinary Course of Business	40

	5.22 Insurance	40

	5.23 Compliance with Law	40

	5.24 Absence of Default	40

	5.25 Agreements with Affiliates	40

	5.26 Gas Contracts	41