EXHIBIT 10.1
April 18, 1997
Texoil, Inc.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention:Xx. Xxxxx Xxxxxxx
Gentlemen:
Resource Investors Management Company Limited Partnership ("RIMCO"), on behalf
of RIMCO Partners, L.P., RIMCO Partners, X.X. XX, RIMCO Partners, L.P. III and
RIMCO Partners, X.X. XX (the "Purchasers"), hereby agrees to purchase, and
Texoil Company (the "Company"), a wholly owned subsidiary of Texoil, Inc.,
hereby agrees to sell at private sale, at par, up to $1.5 million in principal
amount of the Company's 10% Senior Secured Exchangeable General Obligation Notes
(the "Notes").
This agreement is contingent upon completion of appropriate documentation fully
satisfactory in form and substance to each of us and our respective counsel. It
is hereby agreed that such documentation shall contain terms as described in the
attached Summary of Principal Terms, and in addition, representations, business
covenants and other provisions customary to similar transactions.
The commitment represented by this letter is made subject to, and in reliance
upon, the accuracy of information previously supplied to RIMCO, and the
understanding that there is no information that has not been supplied to RIMCO
in writing that might have a material adverse affect on the Company's business
or financial condition. The commitment hereunder is further conditioned upon the
absence of any material adverse change prior to closing in the value or
condition of the collateral to be pledged as security for the Notes.
It is understood that the law firm of Xxxxxxx & Xxxxx, L.L.C. will act as
counsel for the Purchasers in this matter. Whether or not the proposed
transaction is consummated, you hereby agree to pay all of the Purchaser's
out-of-pocket expenses in connection with the consummation of the sale and
purchase of the Notes, including without limitation, the reasonable fees and
expenses of the Purchasers' counsel and title consultant.
It is mutually understood and agreed that this letter shall be construed and the
relations between the parties determined in accordance with the law of the state
of Texas. It is also mutually understood and agreed that the Note purchase
agreements and other resulting transaction documents shall be deemed to be
contracts made under and shall be construed in accordance with and governed by
the law of the state of New York. It is further understood and agreed that any
action relating to this letter shall be instituted and prosecuted in the United
States District Court for the Southern District of Texas situated in Xxxxxx
County, Texas, to whose jurisdiction the parties hereto agree whatever their
domicile may be.
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JURY TRIAL WAIVED. RIMCO and the Company hereby agree that they shall and hereby
do waive trial by jury in any action, proceeding or counterclaim, whether at law
or at equity, brought by either of them, or in any matter whatsoever which
arises out of or is connected in any way with this commitment letter or its
performance.
The commitment represented by this letter shall automatically expire on April
25, 1997 if we have not received a copy of this letter duly executed by you on
or prior to such date. The expiration date of this commitment may not be
extended except by a written instrument executed by a duly authorized officer of
RIMCO.
RIMCO shall have the option to immediately terminate this commitment letter by
giving written notice thereof by registered or certified mail to the Company if
the Company fails to satisfy or perform any of the terms, conditions or
provisions of this commitment letter, or supplies RIMCO with any false or
misleading information.
This commitment shall be terminated if the closing of the transaction
contemplated hereby has not been consummated on or before May 15, 1997, except
that your obligation to pay all expenses of the Purchasers' counsel and title
consultant as described above shall survive any such termination.
If all of the foregoing is acceptable to you, please so indicate by signing and
returning one copy of this letter to Xxxx Xxxxxxx c/o RIMCO, 000 Xxxxxx, Xxxxx
0000, Xxxxxxx, XX. 00000.
Very truly yours,
RESOURCE INVESTORS MANAGEMENT COMPANY
LIMITED PARTNERSHIP
By: /s/ XXXX X. XXXXXXX
Its: Senior Vice President
TEXOIL, INC.
By: /s/ XXXXX XXXXXXX
Its: President and CEO
Date: APRIL 21, 1997
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SUMMARY OF PRINCIPAL TERMS
Issue: Senior Secured Exchangeable General Obligation Notes (the
"Notes")
Issuer: Texoil Company ("Texoil"), a wholly owned subsidiary of
Texoil, Inc. ("Parent")
Purchasers: Resource Investors Management Company, through one or more
of its affiliated entities ("RIMCO").
Interest Rate: 10% per annum, payable monthly.
Commitment Amount: $1,500,000
Commitment Period: Six months
Maturity: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Security: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Use of Proceeds: Primarily to fund Texoil's share of drilling
and completion costs for the first xxxxx to-be-drilled in
the Raceland and Green's Lake 3-D projects. The last
$500,000 of the Commitment Amount may only be used for
completion costs on these xxxxx unless another use of
proceeds is agreed to by RIMCO.
Payments: Prior to Maturity, payments of interest will be due and
payable monthly. All outstanding principal plus any accrued
and unpaid interest will be due and payable at Maturity.
Texoil shall not have the right or option to prepay, at any
time, all or any part of the Notes.
Conversion: The Notes are exchangeable at any time prior to Maturity, in
whole or in part, into Parent's Common Stock at a per share
price equal to $1.50, subject to adjustment. Should such
stock close at a price per share equal to or greater than
$3.00 for any consecutive twenty day trading period after
the Commitment Period, Parent can force the Purchasers to
exchange the Notes into its Common Stock. If Parent elects
not to force conversion within 30 days, the 20 day
consecutive trading period count will begin anew.
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Registration Rights:The shares subject to issuance upon exchange of the
Notes shall be registered under the Securities Act of 1933
within 45 days of such conversion pursuant to a Registration
Statement which shall cover the possible resale of such
shares by the Purchasers should they so elect to do so.
Covenants: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Documentation and
Reports: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
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