Exhibit 10.1
SECOND 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 Second Amendment to the First Amended and Restated Loan Agreement dated
September 23, 1996 (this "Second 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 day of August
1997, effective as of May 1, 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 (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
Guarantors existing on the date of this Agreement, which is initially
$2,000,000.00 as of the date of this Agreement, and as redetermined at the
discretion of the Bank from time to time in accordance with Section 2.03 of this
Agreement; provided, however, that from and after the effective date of the
Second Amendment, Borrowing Base II shall be $0.00.
"Conversion Date" means July 1, 1999.
"Floating Rate" means the Bank's Base Rate in effect from time to time
plus twenty-five hundredths of one percent (0.25%).
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"LIBOR Rate" means a rate per annum equal to the sum of LIBOR for the
Interest Period for which interest is to be determined at the LIBOR Rate, plus
two and twenty-five hundredths percent (2.25%) per annum.
"Revolving Commitment Limit" means $18,600,000.00 as of the date of the
Second Amendment, and such different amounts as are subsequently established,
from time to time, pursuant to Section 2.19 hereof.
"Second Amendment" means the Second Amendment to this Agreement
executed by Borrower and Bank on August , 1997.
"Termination Date" means July 1, 2002.
Section 2.01 is amended by adding the following text after the first sentence of
the second grammatical paragraph thereof:
Following the date of the Second Amendment, the Borrower shall not be entitled
to request and the Bank shall not be obligated to advance any additional
Borrowing Base II Loans.
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 May 1, 1997, Borrowing Base I is redetermined to be Eighteen Million Six
Hundred Thousand and No/100 Dollars ($18,600,000.00), which shall thereafter
decline in the amount of $435,000.00, monthly, beginning on June 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 Second Amendment, Borrowing Base
II is redetermined to be $0.00, and Borrowing Base II shall remain at $0.00 and
shall not be redetermined throughout the remaining term of this Agreement.
Article III is hereby amended by adding the following new Section 3.14
thereto:
3.14 Closing of Second 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 Second Amendment, in addition to Borrower satisfying the
requirements 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 Second
Amendment.
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(b) a Compliance Certificate executed by Borrower.
(c) a mortgage of the Oil and Gas Properties of Saba Petroleum, Inc., that are
described on Exhibit "A" to the Second Amendment, pursuant to which such
properties are mortgaged to secure the obligations of Borrower to the Bank and
Saba Petroleum, Inc.'s obligations under its Guaranty to the Bank.
(d) a WCC-1 Financing Statement, in form and substance satisfactory to the Bank,
relating to the instruments identified in clause (c), above.
(e) Transfer Order Letters, in form and substance satisfactory to the Bank, from
Saba Petroleum, Inc. to the Bank covering Saba Petroleum, Inc.'s interest in
production from the Oil and Gas Properties described on Exhibit "A" to the
Second Amendment.
(f) such other documents and instruments as Bank may reasonably request.
The terms "satisfactory evidence" or "evidence satisfactory to the Bank," as
used in this Section 3.14, means evidence satisfactory to the Bank, in its sole
discretion.
Article V is hereby amended by deleting Section 5.32 thereof in its entirety.
Section 6.11 is hereby amended in its entirety to read as follows:
6.11 Intercompany Investments. Make any loans, advances or investments
to any Subsidiary or Affiliate of Borrower who is not a Guarantor exceeding
$2,000,000.00 per year, on a tolling four-quarter basis, net of any cash equity
raised through sales of shares of Borrower.
Section 6.14 is hereby amended by replacing "$200,000.00" with of "$300,000.00".
II. Reaffirmation of Representations and Warranties. To induce the Bank to enter
into this Second 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:
A. The execution and delivery of this Second Amendment and the
performance by the Borrower and each Guarantor of its obligations under this
Second Amendment are within the Borrower's and each Guarantor's power, have been
duly authorized by all necessary corporate action, have received 3
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 Second 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 Second 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 SECOND 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 Second 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
Second 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.
VII. Severability. Whenever possible each provision of this Second Amendment
shall be interpreted in such manner as to be
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effective and valid under applicable law, but if any provision of this Second
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
Second Amendment.
VIII. Execution in counterparts. This Second 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 Second Amendment are for
convenience of reference only, and shall not affect the construction of this
Second Amendment.
X. Successors and Assigns. This Second 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 SECOND 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 Second 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
GUARANTORS:
SABA ENERGY OF TEXAS, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
President
SABA PETROLEUM, INC.
By: /s/ Xxxx Xxxxxx
President
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
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EXHIBIT "A"
PROPERTY DESCRIPTION
Casmalia Area
Santa Barbara, California
Lease/Unit WI NRI
Producing Xxxxx
Xxxxxxxxx:
Xxxxxxxxx 82 1.0000 .8318750
Xxxxxxxxx 103
Xxxxxxx:
Xxxxxxx 1 1.0000 .8333333
Xxxxxxx 2
Xxxxxxx 4
Xxxxxxxx:
Xxxxxxxx 1 1.0000 .8318750 Xxxxxxxx 3 Xxxxxxxx 4 Xxxxxxxx 11 Xxxxxxxx 25
Xxxxxxxx 33 Xxxxxxxx 56 Xxxxxxxx 61 Xxxxxxxx 62 Xxxxxxxx 63 Xxxxxxxx 64
Xxxxxxxx 65 Xxxxxxxx 67 Xxxxxxxx 68 Xxxxxxxx 71 Xxxxxxxx 73 Xxxxxxxx 75
Xxxxxx:
Xxxxxx 1 1.0000 .8333333
Musico 2
Righetti:
Righetti 4 1.0000 .8068750
Escolle: 1.0000 .8333333
Lospe: 1.0000 .8333333
A1
Oil and Gas Lease Descriptions
Casmalia Area
Santa Barbara, California
X. Xxxxxxxxx Lease
A. SUBJECT ACREAGE: Portion of Punta de la Laguna Rancho, located
in Section 13, Township 9 North, Range 35 West, and Sections 7 and 18 of
Township 9 North, Range 34 West, containing 434.64 acres, more or less, all as
more fully described in said leases.
B. SUBJECT LEASES:
1. Oil and Gas Lease dated August 16, 1930 by and
between Xxxxxxx X.Xxxxxxxxx, et al, as Lessor, and
O.C. Field, as Lessee, and recorded in
Volume 220, Page 421 of the Records of
Santa Xxxxxxx County, California, as amended;
2. Oil and Gas Lease dated April 18, 1945 by and between
Xxxxxx Xxxxxxx, et al, as Lessor, and Fullerton Oil
Company, as Lessee, and recorded in Volume 649, Page
176 of the Records of Santa Xxxxxxx County,
California, as amended;
II. Xxxxxxx Lease
A. SUBJECT ACREAGE: Portion of Punta de la Laguna, located in
Sections 12 and 13 of Township 9 North, Range 35
West, and Sections 7 and 18 of Township 9 North,
Range 34 West, containing 184.00 acres, more or less.
B. SUBJECT LEASE:
1. Oil and Gas Lease dated November 1, 1964 by
and between X.X. Xxxxxxx, et al, as
Lessor, and Union Oil Company of California,
as Lessee, and recorded in Volume 2104, Page
1188 of the Records of Santa Xxxxxxx County,
California, as amended;
III. Escolle Lease
A. SUBJECT ACREAGE:
Parcel I - Commencing at the Northeast corner of the Escolle property
being the terminous of the eighth course in the lands described in Oil
and Gas Lease dated January 7, 1980 between Escolle Tenants-In-Common,
as Lessor, and Union Oil Company of California, as Lessee, a Memorandum
of which was recorded May 29, 1980 in Book 80, Page 21450, Official
Records of Santa Xxxxxxx County, California, from which corner No. 13
of Rancho Todos Xxxxxx, marked T.S. No. 13, bears North Westerly 64.00
chains to a point on the section line between Sections twenty-one (21)
and twenty-eight (28), Xxxxxxxx 0 Xxxxx, Xxxxx 00
X-0
Xxxx, X.X.X. & M., 22.72 chains westerly from the common corner to
Sections 21, 22, 27 and 28, T9N., R34W., S.B.B. & M., thence West,
25.51 chians to a station; thence North, 35.28 chains to said Corner
No. 13; thence from said point of commencement, North 85 (degree) 17'
4" West, 2770.0 feet to the true point of beginning; thence from said
true point of beginning the following courses and distances: West,
1591.4 feet; South, 710.5 feet; West, 414.9 feet; South, 829.0 feet;
East, 658.2 feet; South, 626.9 feet; East, 1278.9 feet; South, 654.8
feet; to a point on the southernly line of Block II of said Escolle
lease; thence East, along said south line 805.8 feet; thence North,
2093.0 feet; thence West, 736.7 feet; thence North, 728.2 feet to the
true point of beginning and containing 120 acres, more or less.
Parcel II - Commencing at corner No. 13 of Rancho Todos Xxxxxx marked
T.S. No. 13 from which a live oak 15 inches in diameter bears South
37(degree) West, 6.30 chains distant; thence along the north line of
said Rancho North 83(degree) 43' West, 103.25 chains to a station;
thence South, 77.96 chains to a station; thence East, 70.40 chains to
the true point of beginning from which the one-quarter (1/4) section
corners between Sections 28 and 29, T9N., R34W., S.B.B. & M. bears
South, 8.70 chains distant; thence from said true point of beginning
the following courses and distances; North, 718.2 feet; West, 646.6
feet; North, 900.4 feet; West, 884.0 feet; South, 1106.2 feet; East,
299.6 feet; South, 512.4 feet to a point on the southernly line of
Block I of said Escolle Lease; thence East along said south line 1231.1
feet to the true point of beginning and containing 40 acres, more or
less.
Xxxxxxx III- Commencing at corner No. 13 of Rancho Todos Xxxxxx marked
T.S. No. 13 from which a live oak 15 inches in diameter bears South
37(degree) West, 6.30 chains distant; thence along the north line of
said Rancho North 83(degree) 43' West, 103.25 chains to a station;
thence South, 77.96 chains to a station; thence East, 70.40 chains to a
station from which the one-quarter (1/4) Section corners between
Sections 28 and 29, T9N., R34W., S.B.B. & M. bears South, 8.70 chains
distant; thence South, 176.8 feet to a point "on" the east line of
Block II of said Escolle Lease and the true point of beginning; thence
continuing South through said one-quarter (1/4) section corners and
along said east line 934.0 feet; thence East, 934.0 feet; thence North,
934.0 feet; thence West, 934.0 feet to the true point of beginning and
containing 20 acres, more or less.
B. SUBJECT LEASES:
1. Oil and Gas Lease dated September 25, 1947 by and between
Escolle Estate Company, as Lessor, and Union Oil Company of
California, as Lessee, and recorded in Volume 736, Page 290 of
the O.R. of Santa Xxxxxxx County, California, as amended;
2. Oil and Gas Lease dated January 7, 1980 by and between Escolle
Tenants in-Common, as Lessors and Union Oil Company of
California, as Lessee, a memorandum of which is recorded as
Document #80-21450 of the O.R.
of Santa Barbara, California, as amended;
A-3
IV. Xxxxxx Lease
A. SUBJECT ACREAGE: Portion of Subdivision Xx. 00 xx xxx Xxxxxx
Xxxxx xx xx Xxxxxx, located in Section 24 of Township 9 North,
Range 35 West, containing 30.00 acres, more or less.
SUBJECT LEASE:
1. Oil and Gas Lease dated November 19, 1971 by and between
Xxx X.Xxxxxx, et al, as Lessor, and Union Oil Company of
California, as Lessee, and recorded in Volume 2386,
Page 581 of the O.R. of Santa Xxxxxxx County, California,
as amended;
X. Xxxxxxxx Lease
A. SUBJECT ACREAGE: Portion of Rancho Punta de la Laguna, located
in Sections 13 and 24 of Township 9 North, Range 35 West, and
Sections 18 and 19 of Township 9 North, Range 34 West,
containing 491.00 acres, more or less; and
Those portions of Subdivision Xx. 00 xx xxx Xxxxxx Xxxxx xx xx
Xxxxxx, in the County of Santa Xxxxxxx, State of California,
according to the Final Decree of Partition of said Rancho
dated November 5, 1880, a certified copy of said Decree having
been recorded in Book "W" of Deeds at page 333, record of said
County. Containing in the aggregate, 62.86 acres, more or
less.
B. SUBJECT LEASE:
1. Oil and Gas Lease dated August 18, 1930 by
and between Xxxxxxxx Xxxxxxxx, as Lessor
and O.C. Field, as Lessee, and recorded in
Volume 222, Page 538 of the O.R. of Santa
Xxxxxxx County, California, as amended;
2. Oil and Gas Lease evidenced by Memorandum of
Oil and Gas Lease dated November 20,
1995 by and between Xxxxxxxx Ranch, a
Limited Partnership and Saba Petroleum,
Inc., Counterpart #1 of which has been
recorded February 1, 1996 under File No.
96-006527 in the Official Records of Santa
Xxxxxxx County, California; Counterpart #2
of which has been recorded February 1, 1996
under File No. 96-006528 in the Official
Records of Santa Xxxxxxx County, California;
and Counterpart #3 of which has been
recorded February 1,1996 under File No.
96-006529 in the Official Records of Santa
Xxxxxxx County, California.
VI. Righetti Lease
A. SUBJECT ACREAGE: Portion of Lot or Subdivision Xx. 00 xx xxx
Xxxxxx Xxxxx xx xx Xxxxxx, located in Section 13 of Township
9 North, Range 35 West, containing 40.00 acres, more or
less, INSOFAR AND ONLY INSOFAR as it covers rights to a
depth of 4,500'.
A-4
SUBJECT LEASE:
1. Oil and Gas Lease dated February 8, 1934 by and between X.
Xxxxxxxx, et al, as Lessor, and Xxxxxxx X.Xxxxxx, XX, as
Lessee, and recorded in Volume 301, Page 59 of the O.R. of
Santa Xxxxxxx County, California, as amended;
VII. Righetti "B" Lease
A. SUBJECT ACREAGE: Portion of Lot or Subdivision Xx. 00 xx xxx
Xxxxxx Xxxxx xx xx Xxxxxx, located in Sections 13 and 14 of
Township 9 North, Range 35 West, containing 40.00 acres, more
or less, INSOFAR AND ONLY INSOFAR as it covers rights lying
below 4,500'.
SUBJECT LEASE:
1. Oil and Gas Lease dated June 24, 1965 by and between Xxxxxx
Xxxxxxxx, et al, as Lessor, and Union Oil Company of
California, as Lessee, and recorded in Volume 2112, Page 677
of the O.R. of Santa Xxxxxxx County, California, as amended.
A-5
