1 Exhibit 10.2
THIRD AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT DATED SEPTEMBER 23, 1996 BY AND
BETWEEN SABA PETROLEUM COMPANY, ET AL.
AND BANK ONE, TEXAS, N.A.
This Third Amendment to the First Amended and Restated Loan Agreement dated
September 23, 1996 (this "Third Amendment") by and between SABA PETROLEUM
COMPANY, a Delaware corporation, successor by merger to Saba Petroleum Company,
a Colorado corporation (the "Borrower") et al., and BANK ONE, TEXAS, N.A., a
national banking association (the "Bank"), is entered into on this 5th day of
September 1997. W I T N E S S E T H: Borrower and Bank have entered into a First
Amended and Restated Loan Agreement dated September 23, 1996, as amended by the
First Amendment thereto dated November 5, 1996, and as further amended by the
Second Amendment thereto dated August 28, 1997 (collectively, the "Loan
Agreement"). Borrower has requested that Bank amend certain provisions of the
Loan Agreement, and the Bank has agreed to such amendments to the extent
expressly set forth herein. NOW, THEREFORE, in consideration of the promises
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the Borrower and the Bank, and each
intending to be legally bound hereby, the parties agree as follows: I. Specific
Amendments to Loan Agreement. Article I is hereby amended by adding or
replacing, as applicable, the following definitions: "Borrowing Base II" means
the maximum amount that will be made available to Borrower for the development
of Oil and Gas Properties of Saba Petroleum, Inc. existing on the date of the
Third Amendment, as redetermined at the discretion of the Bank from time to time
in accordance with Section 2.03 of this Agreement. "Borrowing Base II Loans"
means Loans advanced to Borrower for purposes of developing Oil and Gas
Properties of Saba Petroleum, Inc. existing on the date of the Third Amendment,
not to exceed at any one time outstanding the amount of Borrowing Base II, as
established from time to time hereunder. -. "Revolving Commitment Limit" means
$22,500,000.00 as of the date of the Third Amendment, and such different amounts
as
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are subsequently established,from time to time, pursuant to Section 2.19 hereof.
"Third Amendment" means the Third Amendment to this Agreement executed by
Borrower and Bank on September 5, 1997. "Termination Date" means July 1, 2002;
provided that solely with respect to Borrowing Base II Loans, "Termination Date"
means September 1, 1999. Article I is further amended by deleting therefrom the
definitions of "Tranche 1 Loan(s)" and "Tranche 2 Loan(s)." Section 2.01 is
amended by deleting therefrom the sentence that was added after the first
sentence of the second grammatical paragraph thereof, pursuant to the Second
Amendment. Section 2.03 is amended by deleting the first grammatical paragraph
thereof in its entirety, and inserting the following text in its place: As of
August 1, 1997, Borrowing Base I is redetermined to be Nineteen Million One
Hundred Thousand and No/100 Dollars ($19,100,000.00), which shall thereafter
decline in the amount of $400,000.00, monthly, beginning on September 1, 1997,
and continuing on the first day of each successive month thereafter until the
effective date of the next redetermination of the Borrowing Base as set forth in
this Section. As of the effective date of the Third Amendment, Borrowing Base II
is redetermined to be $3,400,000.00, which shall thereafter decline by
$142,000.00 monthly beginning on November 1, 1997, and continuing on the first
day of each successive month thereafter until the effective date of the next
redetermination of the Borrowing Base as set forth in this Section. Section 2:13
is hereby amended to add the following sentence at the end of such Section. Upon
execution of the Third Amendment, the preceding provisions of this Section shall
no longer be in effect, and at that time, Borrower shall contemporaneously pay
to Bank an additional facility fee of $34,000.00. Section 2.16 is amended to
replace the term "Revolving Commitment," each place it appears in such Section
with the term "Borrowing Base I." Article III is hereby amended by adding the
following new Section 3.15 thereto: 3.15 Closing of Third Amendment. Prior to
the funding of any Loans that are based on the availability resulting from the
increase in the Borrowing Base pursuant to the Third Amendment, in addition to
Borrower satisfying the requirements
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of the other applicable Sections of Article III, the Bank shall have received:
(a) a certificate of the secretary or assistant secretary of Borrower and of
Saba Petroleum, Inc. attesting to the adoption of resolutions by Borrower and
Saba Petroleum, Inc. authorizing the transactions evidenced by the Third
Amendment. (b) a Compliance Certificate executed by Borrower. (c) such other
documents and instruments as Bank may reasonably request. Section 5.20 is
amended to replace the dollar amount "$6,250,000.00" that appears therein with
the dollar amount "$18,000,000.00", and to replace the date "June 30, 1995,"
that appears three times therein with the date "June 30, 1997," in each place.
Section 6.09 is hereby amended in its entirety to read as follows: 6.09
Investments and Certain Capital Expenditure. Make Investments in, or purchase or
otherwise acquire all or substantially all of the assets of any Person
(including Affiliates of Borrower), or any shares of stock of, or similar
interest in, any Person (including the Affiliates of Borrower), or make capital
expenditures for items other than for the exploration, development or purchase
of Oil and Gas Properties located in the United States or for the purchase of
equipment to facilitate the production of oil or gas owned by Borrower or any of
its subsidiaries, exceeding in the aggregate, in any one-year period, determined
on a rolling four-quarter basis, twenty percent (20%) of Borrower's tangible net
worth (as determined pursuant to Section 5.20) as of the end of -the last
quarter included in such one year period . Section 6.11 is hereby amended in its
entirety to read as 6.11 THIS SECTION IS INTENTIONALLY LEFT BLANK. Section 6.13
is hereby amended in its entirety to read as 6.13 THIS SECTION IS INTENTIONALLY
LEFT BLANK. II. Reaffirmation of Representations and Warranties. To induce the
Bank to enter into this Third Amendment, the Borrower and each Guarantor hereby
reaffirms, as of the date hereof, its representations and warranties contained
in Article IV of the Loan Agreement and in all other documents executed pursuant
thereto, and additionally represents and warrants as follows:
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A. The execution and delivery of this Third Amendment and the performance by the
Borrower and each Guarantor of its obligations under this Third Amendment are
within the Borrower's and each Guarantor's power, have been duly authorized by
all necessary corporate action, have received all necessary governmental
approval (if any shall be required), and do not and will not contravene or
conflict with any provision of law or of the charter or by-laws of the Borrower
or any Guarantor or of any agreement binding upon the Borrower or any Guarantor.
B. The Loan Agreement as amended by this Third Amendment represents the legal,
valid and binding obligations of the Borrower and each Guarantor, enforceable
against each in accordance with their respective terms subject as to enforcement
only to bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally. C. No Event of Default
or Unmatured Event of Default has occurred and is continuing as of the date
hereof. III. Defined Terms. Except as amended hereby, terms used herein that are
defined in the Loan Agreement shall have the same meanings herein. IV.
Reaffirmation of Loan Agreement. This Third Amendment shall be deemed to be an
amendment to the Loan Agreement, and the Loan Agreement, as further amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Loan Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the Loan
Agreement as amended hereby. V. Entire Agreement. The Loan Agreement, as hereby
further amended, embodies the entire agreement between the Borrower, the
Guarantors and the Bank and supersedes all prior proposals, agreements and
understandings relating to the subject matter hereof. The Borrower and each
Guarantor certifies that it is relying on no representation, warranty, covenant
or agreement except for those set forth in the Loan Agreement as hereby further
amended and the other documents previously executed or executed of even date
herewith. VI. Governing Law. THIS THIRD AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. This Third Amendment has been entered into
in Xxxxxx County, Texas, and it shall be performable for all purposes in Xxxxxx
County, Texas. Courts within the State of Texas shall have jurisdiction over any
and all disputes between the Borrower and the Bank, whether in law or equity,
including, but not limited to, any and all disputes arising out of or relating
to this Third Amendment or any other Loan Document; and venue in any such
dispute whether in federal or state court shall be laid in Xxxxxx County, Texas.
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VII. SeverabilitY. Whenever possible each provision of this Third Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Third Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Third Amendment.
VIII. Execution in Counterparts. This Third Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument, and any
signed counterpart shall be deemed delivered by the party executing such
counterpart if sent to any other party hereto by electronic facsimile
transmission.
IX. Section Captions. Section captions used in this Third Amendment are for
convenience of reference only, and shall not affect the construction of this
Third Amendment.
X. Successors and Assigns. This Third Amendment shall be binding upon the
Borrower, each Guarantor and the Bank and their respective successors and
assigns, and shall inure to the benefit of the Borrower, each Guarantor and the
Bank, and the respective successors and assigns of the Bank.
XI. Non-Application of Chapter 15 of Texas Credit Codes. The provisions of
Chapter 15 of the Texas Credit Code (Vernon's Texas Civil Statutes, Article
5069-15) are specifically declared by the parties hereto not to be applicable to
the Loan Agreement as hereby further amended or any of the other Loan Documents
or to the transactions contemplated hereby.
XII. Notice. THIS THIRD AMENDMENT TOGETHER WITH THE LOAN AGREEMENT, AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed as of the day and year first above written.
BORROWER
SABA PETROLEUM COMPANY
By: /s/ Xxxxxx X. Xxxxx Chief Financial Officer
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BANK
BANK ONE, TEXAS, N.A.
By:/s/ Xxxxx X. Xxxxxx
Vice President
SABA ENERGY OF TEXAS, INCORPORATED
By:/s/Xxxxxxx X. Xxxxxxx, President
SABA PETROLEUM, INC.
By:/s/Xxxxxx X. Xxxxx,
Secretary
SABA PETROLEUM OF MICHIGAN, INC.
By:/s/Xxxxxxx X. Xxxxxxx
President
MV VENTURES, G. P.
By: Saba Energy of Texas, Incorporated,
Managing Partner
By:/s/ Xxxxxxx X. Xxxxxxx
President
