ZAZA ZaZa Energy Corporation (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 30, 2015

 

 

ZAZA ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

 

(713) 595-1900

(Registrant’s telephone number, including area code)

 

NOT APPLICABLE

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

As previously reported, on February 21, 2012, ZaZa Energy Corporation (“our” or the “Company”) issued and sold Senior Secured Notes due 2017 (the “Senior Secured Notes”) in the aggregate principal amount of $100,000,000 and warrants to purchase shares of the Company’s common stock pursuant to a securities purchase agreement (as amended, the “Senior Secured Notes Purchase Agreement”) with MSDC ZEC Investments, LLC (“MSDC”), Senator Sidecar Master Fund LP (“Senator”), O-CAP Offshore Master Fund, L.P. (“O-CAP Master Fund”), O-CAP Partners, L.P. (“O-CAP Partners”), Capital Ventures International (“Capital Ventures”), Talara Master Fund, LTD. (“Talara”), Blackwell Partners, LLC (“Blackwell”), Permal Talara LTD. (“Permal Talara”) and Winmill Investments LLC (“Winmill,” and, collectively with MSDC, Senator, O-CAP Master Fund, O-CAP Partners, Capital Ventures, Talara, Blackwell and Permal Talara, the “Purchasers”).

 

Pursuant to Amendment No. 8 to the Senior Secured Notes Purchase Agreement (“Amendment No. 8”), the Company had agreed with the Purchasers to prepay, on May 29, 2015, the approximately $13.9 million in aggregate principal amount outstanding under the Senior Secured Notes, plus accrued and unpaid interest and a cash amendment fee in an amount equal to 3% of the aggregate outstanding principal amount (the “Senior Secured Notes Prepayment”).  On May 29, 2015, the Company completed execution of a consent with the Purchasers to extend the date of the Senior Secured Notes Prepayment from May 29, 2015 to June 30, 2015 in exchange for a consent fee equal to an additional 3% of the aggregate outstanding principal amount of the Senior Secured Notes.

 

On June 30, 2015, the Company completed execution of a consent (the “June 2015 Consent”) with the Purchasers to extend the date of the Senior Secured Notes Prepayment from June 30, 2015 to July 15, 2015.

 

The Company is currently in discussions with third party financing sources for a possible transaction to refinance the outstanding principal amount of the Senior Secured Notes.  There is no assurance that the Company will be able to complete such a transaction on favorable terms or at all.

 

The foregoing description of the June 2015 Consent does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the June 2015 Consent attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

 

The information provided in Item 1.01 of this Current Report is incorporated into this Item 2.03 by reference.

 

Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

 

The information provided in Item 1.01 of this Current Report is incorporated into this Item 2.04 by reference.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit No.		Description
10.1		Consent to Extension of Prepayment Date, dated June 30, 2015

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: June 30, 2015

 

 

ZaZa Energy Corporation
By:	/s/ Todd A. Brooks
	Todd A. Brooks President and Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit No.		Description
10.1		Consent to Extension of Prepayment Date, dated June 30, 2015

 

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Exhibit 10.1

 

June 30, 2015

 

ZaZa Energy Corporation

1301 McKinney Street, Suite 2850

Houston, Texas 77010

 

Re:  Securities Purchase Agreement

 

Ladies and Gentlemen:

 

Reference is hereby made to (a) that certain Securities Purchase Agreement, dated February 21, 2012 (as amended and in effect from time to time, including as amended by the Amendment (as defined below), the “Securities Purchase Agreement”), among ZaZa Energy Corporation, a Delaware corporation (the “Company”), and the Purchasers party thereto, (b) that certain Amendment No. 8 to Securities Purchase Agreement, dated as of April 21, 2015, among the Company and the holders of Securities (the “Amendment”) and (c) that certain letter agreement dated May 27, 2015 by and among the Company and the holders of the Notes (the “May 27 Consent”).  Capitalized terms which are used herein without definition and which are defined in the Securities Purchase Agreement shall have the respective meanings set forth in the Securities Purchase Agreement.

 

This letter agreement (this “Consent”) is to confirm that the Company has requested that the holders of the Notes (collectively, the “Holders”) agree to extend the Second Extended Prepayment Date (as defined in the May 27 Consent) from June 30, 2015 to July 15, 2015 (the “Third Extended Prepayment Date”).

 

In consideration of the agreements and provisions herein contained, each of the undersigned Holders hereby agrees that the Second Extended Prepayment Date shall be extended to the Third Extended Prepayment Date, and that the Prepayment Amount (as defined in the Amendment), together with the Amendment Fee (as defined in the Amendment), the Consent Fee (as defined in the May 27 Consent) and all reasonable costs and expenses of the holders of the Securities and the Collateral Agent then owing (including the reasonable fees and expenses of the special counsel of the holders of the Securities and the Collateral Agent), shall be payable in full on the earlier of (a) the Third Extended Prepayment Date and (b) the date of repayment in full of the obligations under the Securities Purchase Agreement, the Notes and the other Transaction Documents (such earlier date, the “Fee Payment Date”).  The Company hereby acknowledges and agrees that the failure to make any of the foregoing payments on the Third Extended Prepayment Date shall result in an immediate Event of Default under paragraph 8A(i) of the Securities Purchase Agreement.

 

This Consent shall become effective upon satisfaction of the following conditions: (a) execution and delivery of this Consent by the Company, Guarantors and each of the Holders, (b) the representations and warranties in Section 5 of the Amendment shall be true and correct in all respects on the date hereof, except that the representations in clauses (f) and (g) of such Section shall be qualified by reference to (i) the ACA Financing Transaction contemplated by and defined in that certain Amendment No. 9 to the Securities Purchase Agreement, dated as of April 23, 2015, among the Company and the holders of Securities and (ii) the warrant adjustment certificates delivered to the holders of the Securities on or prior to the date of the May 27 Consent, and (c) the Company shall have paid the reasonable costs and expenses of the holders of the Securities (including the reasonable fees and expenses of the special counsel of the

 

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holders of the Securities) in connection with the preparation, negotiation, execution and delivery of this Consent as provided in Paragraph 13B(1) of the Securities Purchase Agreement.

 

In consideration of the agreements of the Holders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, except with respect to the representations, warranties and/or covenants of the Holders contained in this Consent, 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, 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 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 of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Consent, 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.

 

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.

 

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.

 

In entering into this Consent, 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 release set forth herein shall survive the termination of this Consent, the Transaction Documents and the payment in full of the Notes.

 

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

 

Each party hereto hereby acknowledges and agrees that time is of the essence to this Consent.

 

Except as amended or waived hereby, all of the respective terms, conditions and provisions of the Securities Purchase Agreement shall remain the same and shall continue in full force and effect.  This Consent supersedes any and all of our prior communications with you (written or oral), if any, regarding the subject of this Consent.

 

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If the foregoing is in accordance with your understanding, please confirm your agreement to the amendment set forth herein by signing this Consent in the space indicated below and return it to us.

 

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

 

This Consent shall be deemed to constitute a Transaction Document for all purposes under the Securities Purchase Agreement.

 

This Consent may be executed in counterparts.  Delivery of an executed signature page by electronic transmission shall be effective as delivery of a manually signed counterpart of this Consent and shall be admissible into evidence for all purposes.

 

[Remainder of page intentionally left blank.]

 

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	Very truly yours,
	MSDC ZEC INVESTMENTS, LLC
	By:	/s/ Marcello Liguori
	Name:	Marcello Liguori
	Title:	Vice President
	SENATOR SIDECAR MASTER FUND LP
	By:	Senator Investment Group LP, its investment manager
		By:	/s/ Evan Gartenlaub
		Name:	Evan Gartenlaub
		Title:	General Counsel

 

 

	O-CAP OFFSHORE MASTER FUND, L.P.
	By:	/s/ Michael Olshan
	Name:	Michael Olshan
	Title:	MGN MBR of GP
	O-CAP PARTNERS, L.P.
	By:	/s/ Michael Olshan
	Name:	Michael Olshan
	Title:	MGN MBR of GP
	CAPITAL VENTURES INTERNATIONAL
	By:	/s/ J. Brad Alles
	Name:	J. Brad Alles
	Title:	Investment Manager
	TALARA MASTER FUND, LTD.
	By:	/s/ Sharon O’shea
	Name:	Sharon O’shea
	Title:	CFO
	BLACKWELL PARTNERS, LLC
	By:	/s/ Mark Corigliano/Jannie Lall
	Name:	Mark Corigliano/Jannie Lall
	Title:	Authorized Signatory/Authorized Signatory
	PERMAL TALARA LTD.
	By:	/s/ Deborah Watson
	Name:	Deborah Watson
	Title:	Director

 

 

	WINMILL INVESTMENTS LLC
	By:	/s/ David J. Millstone
	Name:	David J. Millstone
	Title:	Member

 

 

Accepted and agreed:
ZAZA ENERGY CORPORATION,
a Delaware corporation
By:	/s/ Todd A. Brooks
Name:	Todd A. Brooks
Title:	President and Chief Executive Officer
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
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