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EXHIBIT 10.1
SIXTH AMENDMENT TO SECOND
AMENDED AND RESTATED LOAN AGREEMENT
This SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT (the
"Sixth Amendment") dated effective March 15, 1999, is by and between VENUS
EXPLORATION, INC., a Delaware corporation, formerly known as XPLOR CORPORATION,
a Delaware corporation (the "Borrower"), and XXXXX FARGO BANK (TEXAS), N.A., a
national banking association (the "Bank").
W I T N E S S E T H:
WHEREAS, Bank and Borrower entered into that certain Second Amended and
Restated Loan Agreement dated December 22, 1997 (as the same has been previously
amended through the date hereof is herein called the "Loan Agreement"), pursuant
to which Borrower obtained a credit facility in the amount of up to the lesser
of the Borrowing Base (as defined in the Loan Agreement) or the Commitment (as
defined in the Loan Agreement); and
WHEREAS, Bank and Borrower now desire to further amend that Loan
Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Amendments to the Loan Agreement. The Loan Agreement is, effective
the date hereof, and subject to the satisfaction of the conditions precedent set
forth in Section 6 hereof, hereby amended as follows:
(a) The definition of "Transaction" is hereby deleted in its
entirety and the following substituted for:
"Transaction shall mean the closing and funding of either (i)
a merger with another oil and gas company, with Borrower as
the successor thereto, the result of which will be that
Borrower having an increase in net annual cash flow of at
least $3,000,000, which shall be applied by Borrower to the
Obligations; and (ii) Borrower engages in the acquisition of
oil and gas properties which involves the offering and
placement of equity securities of the Borrower which generates
at least $15,000,000 in net proceeds."
(b) Section 6.34, Transaction, to the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"6.34 Transaction. On or before May 31, 1999, Borrower shall
have consummated a Transaction in form and substance
acceptable to Bank."
2. Ratifications. The terms and provisions as set forth in this Sixth
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement, and except as expressly modified and superseded by
this Sixth Amendment, the terms of the Note and any and all other Loan Documents
executed in connection therewith or hereunto are hereby ratified and confirmed
and shall continue in full force and effect. Borrower and Bank agree that the
Loan Agreement, as amended hereby, the Note and the other Loan Documents shall
continue to be the legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms.
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3. Representations and Warranties. Borrower hereby represents and
warrants to Bank that (i) the execution, delivery and performance of this Sixth
Amendment, and the other documents to be executed and delivered as required
hereby have been duly authorized by all requisite action on the part of
Borrower; (ii) after giving effect to this Sixth Amendment, the representations
and warranties contained in the Loan Agreement, as amended hereby, and any other
Loan Document executed in connection herewith or therewith are true, correct and
complete on and as of the date hereof as though made on and as of the date
hereof; and (iii) after giving effect to this Sixth Amendment, no Event of
Default or Potential Default has occurred and is continuing.
4. Covenant Deviation and Waiver. Without giving effect to this Sixth
Amendment, Borrower would have failed to observe or maintain compliance with the
Current Ratio covenant set forth in Section 6.16 of the Loan Agreement and the
Tangible Net Worth covenant set forth in Section 6.17 of the Loan Agreement.
Borrower has requested, and Bank has approved, a deviation from such compliance
with respect to the aforementioned covenants for a period from the date hereof
through May 31, 1999, at which time Borrower must be in compliance therewith. It
is understood and agreed that Bank's consent to such deviation shall in no way
act as a waiver of any covenants, restrictions, rights or remedies with respect
to the Loan Agreement, but that such deviation shall apply only to the specific
matter and instance set forth hereinabove.
5. Status of Claims. Borrower hereby represents and warrants to Bank
that no facts, events, status or conditions presently exist which, either now or
with the passage of time or the giving of notice or both, presently constitute
or will constitute a basis for any claim or cause of action against Bank, or any
defense to the payment of any of the Obligations. Borrower hereby releases,
relinquishes and forever discharges Bank, its successors, assigns, agents,
officers, directors, employees and representatives, of and from any and all
claims, demands, actions and causes of action of any and every kind or
character, whether known or unknown, present or future, which Borrower may have
against Bank, its successors, assigns, agents, officers, directors, employees
and representatives, arising out of or with respect to any and all transactions
relating to the Loan Agreement, this Sixth Amendment, or any Loan Document,
including any loss, cost or damage, of any kind or character, arising out of or
in any way connected with or in any way resulting from the acts, actions or
omissions of Bank, its successors, assigns, agents, officers, directors,
employees or representatives.
6. Conditions Precedent to Effectiveness of Sixth Amendment. This Sixth
Amendment shall become effective and be deemed effective upon receipt by Bank of
the following:
(i) counterparts of this Sixth Amendment duly executed by
Borrower and Bank;
(ii) there shall not have been, in the sole judgment of Bank,
any material adverse change in the financial condition, business or
operations of Borrower;
(iii) payment by Borrower to Bank of a $10,000.00 waiver
extension fee;
(iv) payment by Borrower of the fees and expenses of counsel
to Bank in connection with the preparation and negotiation of this
Sixth Amendment and all documents and instruments contemplated hereby;
and
(v) the execution and delivery by Borrower of such additional
documents and instruments that Bank and its counsel may deem necessary
to effectuate this Sixth Amendment or any document executed and
delivered to Bank in connection herewith or therewith.
7. Execution Counterparts. This Sixth Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which when taken together shall constitute but one and the same
instrument.
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8. Governing Law. This Sixth Amendment shall be governed by and
construed in accordance with the internal laws of the State of Texas.
9. Successors and Assigns. This Sixth Amendment is binding upon and
shall inure to the benefit of Borrower and Bank and its respective successors
and assigns; provided, however, Borrower may not assign or transfer any of their
rights or obligations hereunder without the prior written consent of Bank.
10. Headings. The headings, captions and arrangements used in this
Sixth Amendment are for convenience only and shall not effect the interpretation
of this Sixth Amendment.
11. NO ORAL AGREEMENTS. THIS SIXTH AMENDMENT, TAKEN TOGETHER WITH THE
OTHER LOAN DOCUMENTS AND ALL SCHEDULES AND EXHIBITS THERETO, REPRESENTS THE
FINAL AGREEMENT OF 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.
12. AGREEMENT FOR BINDING ARBITRATION. THE PARTIES AGREE TO BE BOUND BY
THE TERMS AND PROVISIONS OF THE CURRENT ARBITRATION PROGRAM OF XXXXX FARGO BANK
(TEXAS), N.A., WHICH IS INCORPORATED BY REFERENCE HEREIN AND IS ACKNOWLEDGED AS
RECEIVED BY THE PARTIES, PURSUANT TO WHICH ANY AND ALL DISPUTES SHALL BE
RESOLVED BY MANDATORY BINDING ARBITRATION UPON THE REQUEST OF EITHER PARTY.
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"BORROWER"
VENUS EXPLORATION, INC.
By: /s/ XXXX X. XXXX
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Name: Xxxx X. Xxxx
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Title: President
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"BANK"
XXXXX FARGO BANK (TEXAS) N.A.
By: /s/ XXXXXX X. XXX
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Xxxxxx X. Xxx, Vice President
