FORBEARANCE AGREEMENT
THIS AGREEMENT is made and entered into this 19th day of April 1999, by
and between BANK ONE, TEXAS, N.A. ("Bank One") and SABA PETROLEUM COMPANY
("Saba"), on behalf of itself and certain of its Subsidiaries and GREKA ENERGY
CORPORATION ("GREKA").
R E C I T A T I O N S :
X. Xxxx and Bank One are parties to that certain First Amended and
Restated Loan Agreement dated as of September 23, 1996, as heretofore amended
(the "Loan Agreement").
B. Events of Default and Unmatured Events of Default have occurred and
are continuing under the Loan Agreement.
C. Bank One has notified Saba of such Events of Default and Unmatured
Events of Default, and has notified Saba that Bank One has accelerated and
declared immediately due and payable the outstanding principal balance of the
Loans, plus all accrued, unpaid interest thereon.
D. Bank One has also sent written notice to each of Saba's Subsidiaries
that are Guarantors (other than Sabacol Corporation ("Sabacol")) demanding that
each such Guarantor repay the Loan, in accordance with the terms of its
Guaranty.
E. Bank One has filed a Proof of Claim in the Sabacol Bankruptcy
asserting its right to receive payment on the Loan from Sabacol pursuant to the
terms of Sabacol's Guaranty.
X. XXXXX has notified Bank One of the pendency of certain transactions
involving Saba and/or certain of its Subsidiaries, and has requested that Bank
One forebear from exercising its remedies under the Loan Agreement, at law or in
equity (collectively, the "Remedies") in order to afford GREKA the opportunity
to close certain of such pending transactions and make certain partial payments
to Bank One to be credited to the Loan, and Bank One is willing to agree to such
forbearance on the terms set forth herein:
NOW, THEREFORE, for and in consideration of the premises, for the
mutual benefits to be derived herefrom, and for other good and valuable
consideration, the adequacy of which is hereby acknowledged by each party, the
parties hereto agree as follows:
1. The terms "Bank of New York Transaction," "EnerVest Transaction,"
"Motion to Sell," "Omimex Transaction," "Sabacol Bankruptcy," "SETI Properties"
and "Transactions" shall have the meanings set forth on Exhibit "A" to this
Agreement. All other capitalized terms used in this Agreement, without being
defined herein, shall have the meanings set forth in the Loan Agreement.
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2. Saba and GREKA hereby represent and warrant to Bank One that the
matters stated in the Compliance Certificate dated March 11, 1999, delivered by
Saba to Bank One, and the matters stated in the letter dated March 11, 1999,
from Xx. Xxxxxxx X. Xxxxxx on behalf of Saba to Xx. Xxxxx Xxxxxx of Bank One and
in the enclosures referred to in that letter, were true and correct as of the
date thereof and continue to be true and correct as of the date of this
Agreement.
3. Bank One hereby agrees that it shall forebear from the exercise of
its Remedies through and including May 30, 1999, subject to each of the
following conditions being timely met:
a. Prior to the hearing on the Motion to Sell, which is
currently scheduled to be heard on April 23, 1999, Bank One and the
parties to the Omimex Transaction shall have entered into an agreement
in substantially the same form as that attached hereto as Exhibit "B,"
and incorporated herein.
b. On or before April 30, 1999, an order shall be entered by
the court in which the Sabacol Bankruptcy is pending, following its
hearing on the Motion, approving the closing of the Omimex Transaction
on or before May 30, 1999.
c. The Bank of New York Transaction shall close on or before
April 30, 1999, and contemporaneously with such closing, the cash sum
of $7,000,000.00 will be wire transferred directly to Bank One, Texas,
N.A., Dallas, Texas 201, A.B.A. Number 000000000, BENF-Commercial Loan
Serving Center- South Region, for credit to Account Number 1065151010,
Borrower: Saba Petroleum Company, Obligor No. 0000000000, Obligation
No. 91, Attn: Special Servicing, Commercial Loan Servicing Center-South
Region, to be applied against the outstanding balance of the Loan.
d. On or before May 14, 1999, Sabacol shall have duly executed
and delivered to Bank One a recordable Mortgage or Deed of Trust, and
corresponding Financing Statement ("Security Instruments") in form
acceptable to Bank One, pursuant to which the properties to be assigned
to Sabacol or its affiliates in connection with the Omimex Transaction
shall be subjected to liens and security interests in favor of Bank
One, securing all of the Obligations under the Loan Agreement. Such
Security Instruments shall be held by Bank One, and shall not be
recorded, unless and until Bank One gives its consent to the final
Closing of the Omimex Transaction (as such term is defined in Section
9.1 of the Asset Purchase Agreement attached as Exhibit "B" to the
Motion to Sell), and contemporaneously executes and delivers to the
Omimex Group a release of the liens that have been granted by Omimex
Resources, Inc. in favor of Bank One with respect to the properties
being conveyed from the Omimex Group to Sabacol pursuant to the Omimex
Transaction.
e. The EnerVest Transaction shall close on or before May 29,
1999, and contemporaneously with such closing of the EnerVest
Transaction, the cash sum of $10,000,000.00 shall be wire transferred
to Bank One in accordance with the wire transfer instructions set forth
in paragraph 3c., to be applied to the outstanding balance of the Loan.
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f. Each of the Transactions shall be closed substantially in
accordance with the terms of the documentation made available to Bank
One as of the date of this Agreement, as described in the definition of
each such Transaction on Exhibit "A" attached hereto.
g. Neither Saba nor any of the Guarantors, subsequent to April
13, 1999, shall have caused or permitted any act or event to occur that
gives rise to a new Event of Default or Unmatured Event of Default
under the Loan Agreement, which did not already exist on April 13,
1999.
4. Upon the failure of any of the foregoing conditions, Bank One's
agreement to forebear from the pursuit of its Remedies shall thereupon be
terminated, and Bank One thereafter shall be free to pursue any and all of its
Remedies; provided, however, that no such termination of Bank One's agreement to
forbear from the exercise of its Remedies shall be retroactive with respect to
any of the Transactions closed with Bank One's consent prior to any such
termination.
5. To the extent that all of the conditions set forth in paragraphs 3a.
through g. have been satisfied, if any Event of Default or Unmatured Event of
Default exists and is continuing subsequent to May 30, 1999, Bank One shall
thereafter be free to pursue any and all of its Remedies.
6. Time is of the essence in the satisfaction in each of the conditions
set forth in paragraph 3 of this Agreement, and no such condition shall be
deemed to have been satisfied unless it is fully and completely satisfied by the
time stated in paragraph 3 hereof.
7. Nothing in this Agreement is intended to amend nor shall be
construed to amend the Loan Agreement or any of the Loan Documents, except as
expressly set forth herein.
8. This Agreement may be executed in multiple counterparts, and each
party agrees that the counterpart signature page executed on its behalf may be
collated with the counterpart signature pages executed on behalf of the other
parties hereto to form a fully executed agreement. The parties hereto agree that
delivery of executed counterparts of this instrument may be made by facsimile,
and each party hereto agrees to be bound by an executed counterpart hereof
bearing the facsimile signature of such party's representative.
Executed as of the date first set forth above.
BANK ONE, TEXAS, N.A. SABA PETROLEUM COMPANY
By: / s / Xxxxxxx X. Xxxxxx By: / s / Xxxxxxx X. Xxxxxx
--------------------------------- -----------------------------
Xxxxxxx X. Xxxxxx, Vice President Xxxxxxx X. Xxxxxx
CEO
GREKA ENERGY CORPORATION
By: / s / Xxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxx X. Xxxxxx
CEO
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EXHIBIT "A"
"Bank of New York Transaction" means that certain Loan Transaction as
described in Letter of Intent dated March 9, 1999, between BNY Financial
Corporation, Santa Xxxxx Refining Company and Saba.
"EnerVest Transaction" means that certain Purchase and Sale Transaction
pursuant to which the SETI Properties will be sold to EnerVest Energy, L.P.
pursuant to the form Purchase and Sale Agreement transmitted to counsel for Bank
One by e-mail on April 14, 1999, at e-mail address "xxxxxxx@xxxxxxxxxxxx.xxx."
"Motion to Sell" means that certain Motion for Order Authorizing Debtor
and Debtor-in-Possession to Sell all of its Real and Personal Property Assets
pursuant to an Asset Purchase Agreement with the Omimex Group Free and Clear of
all Liens and Encumbrances and upon Consummation of the Sale, to Dismiss this
Bankruptcy Case and Set Bar Date filed by Sabacol, Inc. in the Sabacol
Bankruptcy.
"Omimex Transaction" means that certain Transaction as identified in
the [Motion to Sell] filed on behalf of Sabacol in the Sabacol Bankruptcy on
March 29, 1999.
"Sabacol Bankruptcy" means that certain voluntary Chapter 11 proceeding
styled In re Sabacol, Inc. initiated by Sabacol, Inc. pursuant to its Petition
filed on or about December 11, 1998 in the United States Bankruptcy Court for
the Central District of California, Santa Xxxxxxx Division, as Xxxx Xx. XX
00-00000XX.
"SETI Properties" means the Oil and Gas Properties owned by Saba Energy
of Texas, Inc., expressly excluding any and all of such properties (if any) that
were previously owned by other Subsidiaries of Saba and are subject to a lien or
security interest in favor of Bank One.
"Transactions" means the Omimex Transaction, the Bank of New York
Transaction and the EnerVest Transaction.
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FIRST AMENDMENT TO
FORBEARANCE AGREEMENT
THIS FIRST AMENDMENT ("Amendment") is made and entered into this 30th
day of April, 1999, by and between BANK ONE, TEXAS, N.A. ("Bank One") and SABA
PETROLEUM COMPANY ("Saba"), on behalf of itself and certain of its Subsidiaries
and GREKA ENERGY CORPORATION ("GREKA") who are sometimes referred to herein
colelctively as the Parties.
R E C I T A T I O N S :
A. The Parties entered into that certain Forbearance Agreement
dated April 19, 1999 ("Agreement);
B. The Parties desire to amend the Agreement; and
C. All capitalized terms used in this Amendment, without being
defined herein, shall have the meanings set forth in the
Agreement.
NOW, THEREFORE, for and in consideration of the premises, for the
mutual benefits to be derived herefrom, and for other good and valuable
consideration, the adequacy of which is hereby acknowledged by each party, the
parties hereto agree as follows:
1. Bank One' agreement that it shall forbear from the exercise of
its Remedies through and including May 30, 1999 as provided in
Section 3 of the Agreement shall be extended to June 11, 1999.
2. The amount of the cash sum that will be contemporaneously wire
transferred directly to Bank One upon closing the Bank of New
York Transaction as provided in Section 3(c) of the Agreement
shall be reduced from $7,000,000.00 to $6,000,000.00
3. The closing date of May 29, 1999 as provided in Section 3(e)
of the Agreement for the EnerVest Transaction shall be
extended to June 11, 1999.
4. The date of May 30, 1999 as provided in Section 5 of the
Agreement shall be amended to June 11, 1999.
5. All other terms and conditions of the Agreement remain
unchanged and in full force and effect.
Executed as of the date first set forth above.
BANK ONE, TEXAS, N.A. SABA PETROLEUM COMPANY
By: / s / Xxxxxxx X. Xxxxxx By: / s / Xxxxxxx X. Xxxxxx
--------------------------------- -------------------------
Xxxxxxx X. Xxxxxx, Vice President Xxxxxxx X. Xxxxxx
Chairman, CEO & President
GREKA ENERGY CORPORATION
By: / s / Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Chairman, CEO & President
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AMENDED AND RESTATED FORBEARANCE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 15th day
of July 1999, by and between BANK ONE, TEXAS, N.A. ("Bank One"), SABA PETROLEUM
COMPANY ("Saba"), on behalf of itself and certain of its Subsidiaries, and GREKA
ENERGY CORPORATION ("GREKA").
R E C I T A T I O N S :
X. Xxxx and Bank One are parties to that certain First Amended and
Restated Loan Agreement dated as of September 23, 1996, as heretofore amended
(the "Loan Agreement").
B. Events of Default and Unmatured Events of Default have occurred and
are continuing under the Loan Agreement.
C. Bank One has notified Saba of such Events of Default and Unmatured
Events of Default, and has notified Saba that Bank One has accelerated and
declared immediately due and payable the outstanding principal balance of the
Loans, plus all accrued, unpaid interest thereon.
D. Bank One has also sent written notice to each of Saba's Subsidiaries
that are Guarantors (other than Sabacol Corporation ("Sabacol")) demanding that
each such Guarantor repay the Loan, in accordance with the terms of its
Guaranty.
E. Bank One, Saba and GREKA have heretofore executed that certain
Forbearance Agreement dated April 19, 1999, as amended by First Amendment
thereto dated April 30, 1999 (collectively, the "Original Forbearance
Agreement").
F. Certain of the events on which Bank One had based its agreement to
forbear from the pursuit of its remedies under the Loan Agreement, as set forth
in the Original Forbearance Agreement, have not occurred, but GREKA has notified
Bank One of the pendency of certain pending transactions involving Saba and/or
certain of its Subsidiaries, and has requested that Bank One continue to
forebear from exercising its remedies under the Loan Agreement, at law or in
equity (collectively, the "Remedies") in order to afford GREKA the opportunity
to close such pending transactions and make certain payments to Bank One to be
credited to the Loan, and Bank One is willing to agree to such continued
forbearance on the terms set forth herein:
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NOW, THEREFORE, for and in consideration of the premises, for the
mutual benefits to be derived herefrom, and for other good and valuable
consideration, the adequacy of which is hereby acknowledged by each party, the
parties hereto agree as follows:
1. All capitalized terms used in this Agreement, without being defined
herein, shall have the meanings set forth in the Loan Agreement, unless
otherwise provided herein.
2. Saba and GREKA hereby represent and warrant to Bank One; and Xxxxxxx
X. Xxxxxx, after having first been duly sworn, hereby recertifies to Bank One to
the best of his knowledge in his capacity as an officer of Saba and GREKA; that
the matters he certified in the Compliance Certificate dated March 11, 1999,
delivered by Saba to Bank One, and the matters stated in the letter dated March
11, 1999, from Xx. Xxxxxx on behalf of Saba to Xx. Xxxxx Xxxxxx of Bank One and
in the enclosures referred to in that letter, were true and correct as of the
date thereof and continue to be true and correct as of the date of this
Agreement, except for such changes or additions as are noted on Exhibit "A"
attached hereto.
3. As a material part of the consideration for this Agreement, Saba and
GREKA hereby specifically represent and warrant to Bank One that Saba and its
Subsidiaries are in compliance with the covenants set forth in sections 6.03,
6.06, 6.09, 6.10, 6.11 and 6.12 of the Loan Agreement; and Saba and its
Subsidiaries shall, and GREKA shall cause Saba and its Subsidiaries to, continue
to comply with all such sections of the Loan Agreement. The specific enumeration
in this section of certain representations, warranties and covenants in the Loan
Agreement with which Saba and its Subsidiaries are in compliance and will
continue to comply is not intended, and shall be construed in any way, to amend
any other representation, warranty or covenant in the Loan Agreement or other
Loan Documents, or constitute a waiver by the Bank of Saba's and its
Subsidiaries' compliance therewith.
4. Bank One hereby agrees that it shall forebear from the exercise of
its Remedies through and including September 15, 1999, subject to each of the
following conditions being timely met:
a. The representations and warranties set forth in paragraphs
2 and 3 hereof shall continue to be true and accurate at all times, and
neither Saba nor any of the Guarantors, subsequent to April 13, 1999,
shall have caused or permitted any act or event to occur that gives
rise to a new Event of Default or Unmatured Event of Default that did
not already exist on April 13, 1999.
b. On or before the twenty-fifth (25th) day of each calendar
month, Saba shall have paid to Bank One all accrued, unpaid interest
then due on the Loans.
c. On or before July 15, 1999, Saba shall have entered into a
term sheet with a reputable financial institution or other lender
acceptable to Bank One, in its discretion, pursuant to which such
lender has stated its willingness to fund a loan or loans to Saba on or
before September 15, 1999, all or part of the proceeds of which would
be used to pay off in full the outstanding principal balance and
accrued, unpaid interest owed by Saba to Bank One under the Loan
Agreement and related Loan Documents.
d. Contemporaneously with its execution of this Agreement,
Saba shall have delivered to Bank One true and complete copies of all
documents executed by Saba, Sabacol, Inc., or any of their Affiliates
relating to the "Omimex Transaction," as defined in the Original
Forbearance Agreement; and Bank One shall be satisfied that the Omimex
Transaction was closed substantially in accordance with the terms of
the documentation made available to Bank One in connection with the
Original Forbearance Agreement.
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5. Upon the failure of any of the foregoing conditions, Bank One's
agreement to forebear from the pursuit of its Remedies shall thereupon be
terminated, and Bank One thereafter shall be free to pursue any and all of its
Remedies; provided, however, that no such termination of Bank One's agreement to
forbear from the exercise of its remedies shall be retroactive with respect to
any transactions closed with Bank One's consent prior to such termination.
6. If any Event of Default or Unmatured Event of Default exists and is
continuing subsequent to September 15, 1999, Bank One shall thereafter be free
to pursue any and all of its Remedies.
7. Time is of the essence in the satisfaction in each of the conditions
set forth in paragraph 4 of this Agreement, and no such condition shall be
deemed to have been satisfied unless it is fully and completely satisfied by the
time stated in paragraph 4 hereof.
8. Nothing in this Agreement is intended to amend nor shall be
construed to amend the Loan Agreement or any of the Loan Documents, except as
expressly set forth herein.
9. This Agreement may be executed in multiple counterparts, and each
party agrees that the counterpart signature page executed on its behalf may be
collated with the counterpart signature pages executed on behalf of the other
parties hereto to form a fully executed agreement. The parties hereto agree that
delivery of executed counterparts of this instrument may be made by facsimile,
and each party hereto agrees to be bound by an executed counterpart hereof
bearing the facsimile signature of such party's representative.
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Executed as of the date first set forth above.
BANK ONE, TEXAS, N.A. SABA PETROLEUM COMPANY
By: / s / Xxxxxxx X. Xxxxxx By: / s / Xxxxxxx X. Xxxxxx
--------------------------------- -------------------------
Xxxxxxx X. Xxxxxx, Vice President Xxxxxxx X. Xxxxxx
Chairman, CEO & President
GREKA ENERGY CORPORATION
By: / s / Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Chairman, CEO & President
The undersigned, Xxxxxxx X. Xxxxxx, in his capacity as an officer of GREKA and
Saba, after having first been duly sworn, on oath disposes and says that the
certification given by him in paragraph 2 of the foregoing instrument is true
and correct to the best of his knowledge:
/ s / Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx
Subscribed and sworn to before me, the undersigned Notary Public, by
the said Xxxxxxx X. Xxxxxx on this 16th day of July, 1999.
/ s / Xxx Xxxxxx
-----------------------------------
Notary Public in and for the State
of New York
[Affix Notarial Seal]
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