AMENDMENT AND RESTATEMENT OF LOAN AGREEMENT
THIS AMENDMENT AND RESTATEMENT OF LOAN AGREEMENT (this "Agreement") is
dated as of May 30, 2002, and is by and between VENUS EXPLORATION, INC.
("Borrower"), a Delaware corporation, and THE FROST NATIONAL BANK ("Bank"), a
national banking association.
W I T N E S S E T H:
- - - - - - - - - -
That, in consideration of the mutual covenants, agreements and
undertakings contained herein, Borrower and Bank hereby agree as follows:
I. DEFINITIONS
1.01 Defined Terms. As used in this Agreement, the following
terms have the following meanings:
1. "Ames" shall mean Eugene L. Ames, Jr.
2. "Ames Guaranty" shall mean that certain Guaranty Agreement
dated April 10, 2002, from Ames to Hibernia, guaranteeing, among other matters,
the payment of the LOC Note.
3. "Bank's Counsel" shall mean the law firm of Streit,
Peterson, Hall & Keeney, L.L.P., and each of its lawyers, or such other law firm
or law firms and their lawyers as Bank may retain from time to time in
connection with the loan transaction evidenced by this Agreement.
4. "Borrower's Account" shall have the meaning ascribed
to that term in Paragraph 8.01 hereof.
5. "Business Day" shall mean any day other than a Saturday,
Sunday or legal holiday on which national or state banking institutions in the
City of San Antonio, Bexar County, Texas are not closed as authorized or
required by law, and "Business Days" shall mean more than one Business Day.
6. "Commitment" shall have the meaning ascribed to that term
in Paragraph 2.02 hereof.
7. "Debt" shall mean and include, as to any Person, (a) all
items which in accordance with generally accepted accounting principles would be
included on the liability side of a balance sheet on the date as of which
liabilities are to be determined (excluding capital stock, surplus, surplus
reserves and deferred credits), (b) guaranties, endorsements and other
contingent obligations in respect of, or any obligation to purchase or otherwise
acquire, indebtedness of others, and (c) all indebtedness (including the
Indebtedness) for money, whether borrowed or to be borrowed, matured or
unmatured, secured or unsecured and incurred or assumed.
8. "Deeds of Trust" shall mean the instruments listed as Items
(1) through (9) on Exhibit "A" attached hereto and made a part hereof, covering
the interests of Borrower in the Mortgaged Property, as may be amended,
modified, supplemented and/or ratified from time to time.
9. "Default" shall mean any event that with the lapse
of time, notice or both would constitute an Event of Default.
10. "Encumbrances" shall mean liens, encumbrances, security
interests, contracts, agreements, preferential rights to purchase,
encroachments, easements, rights-of-way, restrictive covenants, conditions,
title defects or irregularities, or other restrictions or limitations of any
nature or kind.
11. "Event of Default" shall mean any of the events or matters
specified as an Option Termination Event in Paragraph 2 of the Note Agreement or
any default or breach in the performance of or compliance with any covenant or
agreement of Borrower in this Agreement, any of the Deeds of Trust or any of the
other Loan Documents to the extent such default or breach is not covered in the
Note Agreement or stated therein to be an Option Termination Event.
12. "Financing Statements" shall mean the Financing Statements
listed as Items (10), (11) and (12) on Exhibit "A" attached hereto and made a
part hereof, as the same may be amended, modified, supplemented, continued
and/or ratified from time to time, and "Financing Statement" shall mean any of
the Financing Statements.
13. "Guarantors" shall mean, collectively, L. Lowry Mays,
James W. Gorman, Robert Scott, Robert Buschman, Michael E. Little, Ames and
John Y. Ames, and "Guarantor" shall mean any of them.
14. "Governmental Authority" shall mean (a) any foreign
governmental authority, (b) the United States of America, (c) any state of the
United States of America, (d) any political subdivision of any of the foregoing,
and (e) any agency, department, commission, board, bureau or court having
jurisdiction over Borrower, Bank or their respective Property.
15. "Hibernia" shall mean Hibernia National Bank, a national
banking association.
16. "Hibernia Loan Agreement" shall mean that certain Loan
Agreement (Line of Credit) dated July 6, 2001, between Borrower and Hibernia, as
heretofore amended by Borrower and Hibernia, relating to the LOC Note.
17. "Highest Lawful Rate" shall mean the highest rate
permitted by applicable law, or if no such maximum rate is established by
applicable law, at the rate stated in Paragraph 3. of the Note plus five percent
(5%) per annum.
18. "Hydrocarbons" shall have the meaning ascribed to
that term or to the terms "Production Proceeds" or "Proceeds of Runs" in
any of the Deeds of Trust.
19. "Indebtedness" shall have the meaning ascribed to
that term in any of the Deeds of Trust.
20. "Investment" shall mean the purchase or other acquisition
of any securities or Debt of, or the making of any loan, advance, transfer of
Property or capital contribution to, or the incurring of any liability,
contingently or otherwise, in respect of the Debt of, any Person.
21. "Leases" shall mean all oil and gas leases, all mineral,
royalty or leasehold interests and all real property interests described in any
exhibit attached to any of the Deeds of Trust.
22. "Legal Requirement" shall mean any law, statute,
ordinance, decree, writ, requirement, order, judgment, rule, regulation (or
interpretation of any of the foregoing) of, and the term of any license or
permit issued by, any Governmental Authority, and "Legal Requirements" shall
mean all of the foregoing.
23. "Lien" shall mean any mortgage, pledge, charge,
assessment, encumbrance, security interest or other lien or restriction of any
kind, whether based on common law, constitutional provision, statute or
contract, and shall include Permitted Encumbrances, and "Liens" shall mean all
of the foregoing.
24. "Loan" shall mean the single advance by Bank to
Borrower under and pursuant to the Commitment.
25. "Loan Documents" shall mean (a) this Agreement, (b) the
Note, (c) the Deeds of Trust, (d) the Financing Statements, (e) the guaranty
agreements executed by each Guarantor, (f) the Note Agreement, (g) the Note
Assignment, (h) all documents, instruments and agreements executed and delivered
contemporaneously herewith or hereafter to Bank pursuant to any of the
foregoing, and (i) all amendments, modifications, renewals, extensions,
supplements, continuations, increases and/or rearrangements of, or substitutions
for, any of the foregoing.
26. "LOC Note" shall mean that certain Line of Credit Note
dated July 6, 2001, executed by Borrower and payable to the order of Hibernia in
the original face amount of $5,000,000.00, as amended.
27. "Mortgaged Property" shall have the meaning
ascribed to that term or the term "Mortgaged Properties" in any of the
Deeds of Trust.
28. "Note" shall mean the Promissory Note (Floating Rate)
executed contemporaneously herewith by Borrower and payable to the order of Bank
in the original amount of the Commitment, and all amendments, modifications,
renewals, extensions, supplements, increases and/or rearrangements thereof.
29. "Note Agreement" shall mean the Note Purchase Option and
Transfer Agreement of even date herewith among all Guarantors and Bank,
conferring upon the Guarantors, among other rights, the right and option to
purchase the Note on the terms and conditions therein provided.
30. "Note Assignment" shall mean that certain Assignment of
Note, Liens, Security Interests and Other Rights of even date herewith from
Hibernia to Bank, assigning all of Hibernia's rights, title and interests in and
to the Hibernia Loan Agreement, the LOC Note, the Deeds of Trust, the Financing
Statements, all liens and security interests owned and held by Hibernia securing
the payment of the LOC Note, the Ames Guaranty and all other loan documents
executed in connection with or which relate to the Hibernia Loan Agreement.
31. "Option Termination Event" shall have the meaning
ascribed to such term in the Note Agreement.
32. "Permitted Encumbrances" shall mean those Encumbrances
which are usual and customary in the oil and gas industry and that alone or in
combination with other Encumbrances do not materially affect the marketability
or value of the Mortgaged Property including second liens which Bank has agreed
Guarantors may place on the Mortgaged Property.
33. "Permitted Investment Securities" shall mean (a) readily
marketable securities issued or fully guaranteed by the United States of
America, (b) commercial paper rated "Prime 1" by Moody's Investors Service with
maturities of not more than 180 days, (c) certificates of deposit or repurchase
certificates issued by banks acceptable to Bank, none of which having a maturity
of more than one (1) year from the date of issuance thereof, and (d) securities
received in settlement of liabilities created in the ordinary course of
business.
34. "Person" shall mean any individual, corporation, general
partnership, limited partnership, limited liability company, joint venture,
trust, unincorporated organization, association, joint stock company,
Governmental Authority or any other form of legal entity, and "Persons" shall
mean all of the foregoing.
35. "Pledge Agreement" shall mean that certain Deposit
Accounts Control Agreement dated April 10, 2002, among Borrower, Hibernia
and Bank.
36. "Prime Rate" shall have the meaning ascribed to that term
in the Note, which is four and three-quarters percent (4.75%) as of the date of
this Agreement.
37. "Proper Form" shall mean in form and substance
satisfactory to Bank and Bank's Counsel.
38. "Property" shall mean any interest in any kind of
property or assets, whether real, personal or mixed, or tangible or
intangible.
1.02 U.C.C. Terms. The terms "accessions," "accounts," "as-extracted
collateral," "continuation statements," "fixtures," "general intangibles,"
"proceeds," "security interests" and "security agreements," as used in any of
the Loan Documents, shall have the respective meanings ascribed to those terms
in the Uniform Commercial Code as enacted and in force in the State of Texas as
of the date of this Agreement.
II. THE LOAN
2.01 Purpose. The loan proceeds of the Loan shall be used by Borrower
solely for the purposes of refinancing the LOC Note, paying in full Indebtedness
of Borrower owed to St. Mary Land & Exploration Company, and for general
business purposes.
2.02 Commitment. Subject to the other terms and conditions of this
Agreement, Bank hereby agrees to make one Loan to Borrower in the amount of Two
Million and No/100 Dollars ($2,000,000.00) (the "Commitment"). Pursuant to the
Commitment and subject to such terms and conditions of this Agreement, Bank
shall make contemporaneously herewith the Loan to Borrower in the amount of Two
Million Dollars ($2,000,000.00) to be used by Borrower for the purposes stated
in Paragraph 2.01 of this Agreement. Borrower's obligation to pay the principal
of and interest on the Loan shall be evidenced by the Note. The Note is payable
to the order of Bank, is dated of even date herewith, is in the amount of the
Commitment, matures on May 30, 2003, bears interest at the Prime Rate plus two
percent (2.00%) on the outstanding balance of the principal thereof, and is
entitled to the benefits of this Agreement and the other Loan Documents. All
past due principal and interest shall bear interest at the Highest Lawful Rate.
The Loan shall be repaid on or before May 30, 2003 in accordance with the terms
and conditions of this Agreement.
2.03 Commitment Fee. In consideration of the commitment to make the
Loan, Borrower shall pay Bank a non-refundable commitment fee in the amount of
$20,000.00. The commitment fee shall be paid by Borrower to Bank
contemporaneously with the execution of this Agreement, and the payment of such
commitment fee is a condition precedent to the obligation to fund the Loan.
2.04 Computation of Interest. Interest with respect to the Loan shall
be computed on the basis of the actual number of days elapsed in a year composed
of 360 days, unless otherwise provided in the Note.
2.05 Sums Payable to Bank. From time to time, Bank shall send to
Borrower statements of all amounts due under the Note and this Agreement, which
statements shall be considered correct and conclusively binding on Borrower and
Bank, absent manifest error. All sums payable to Bank under the Note and this
Agreement shall be paid directly to Bank not later than 2:00 p.m., San Antonio,
Texas time, on the date when due.
2.06 Payment Dates. Whenever any payment of principal of, or interest
on, all or any portion of the Loan shall be due on a day which is not a Business
Day, the date for payment thereof shall be extended to the next succeeding
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise (except as provided in the preceding sentence), interest
thereon shall accrue and be payable thereon at a rate equal to the Highest
Lawful Rate until the principal is paid.
2.07 Funding and Payments. The Loan and all payments hereunder shall be
in immediately available funds and in coin or currency of the United States of
America which at the time the Loan or any payment is made hereunder is legal
tender for the payment of public and private debts.
2.08 Place of Funding and Payments. The Loan made hereunder shall be
funded, disbursed and payable at the banking quarters of Bank in San Antonio,
Bexar County, Texas.
III. CONDITIONS PRECEDENT
3.01 Execution of Loan Documents. In addition to the other conditions
precedent described in Article III hereof, the obligation of Bank to fund the
Loan is subject to the accuracy on the date hereof of all representations and
warranties made by Borrower, Hibernia or Guarantors to Bank in all Loan
Documents, to the performance by Borrower, Hibernia and Guarantors of their
respective obligations under the Loan Documents and to the satisfaction of the
following further conditions: (a) prior to the funding of the Loan, Bank shall
have received the following, all of which shall be in Proper Form: (1) the Note
executed by Borrower, (2) the Note Assignment executed by Hibernia, (3) the Note
Agreement executed by Borrower, all Guarantors and Bank, (4) UCC-3 assignments
from Hibernia to Bank, assigning the Financing Statements, (5) Arbitration and
Notice of Final Agreement executed by Borrower, Bank and each Guarantor, (6)
guaranty agreements executed by each Guarantor, (7) multiple originals of
letters-in-lieu of division orders and/or transfer orders executed by Borrower
addressed in blank and/or to all Persons currently disbursing to Borrower
proceeds derived from the sale of Hydrocarbons produced from the Mortgaged
Property, (8) written assurance acceptable to Bank and Bank's Counsel from
Hibernia that originals of the LOC Note, the Hibernia Loan Agreement and the
Deeds of Trust, file-stamped copies of the Financing Statements in Hibernia's
possession, the Pledge Agreement, and all other loan documents relating to the
LOC Note which are in Hibernia's possession, shall be promptly delivered by
Hibernia to Bank, and (9) such other documents as Bank or Bank's Counsel may
reasonably require; (b) prior to the funding of the Loan, there shall have
occurred, in the sole opinion of Bank, no material adverse change in the
condition of or title or value to the Mortgaged Property or any adverse change
in the assets, liabilities, financial condition, business, operations or
circumstances of Borrower or any Guarantor; (c) prior to the funding of the
Loan, no Default or Event of Default shall have occurred and be continuing; and
(d) the making or funding of the Loan shall not be prohibited by, or subject
Bank to any penalty or onerous condition under, any Legal Requirement.
3.02 UCC Search. In addition to the other conditions precedent
described in Article III hereof, the obligation of Bank to fund the Loan
hereunder is subject to the receipt by Bank of written verification from the
offices of the Texas and Delaware Secretaries of State, obtained at Borrower's
expense, that there are no financing statements and utility security
instruments, or notices thereof, affecting the title to the interests of
Borrower in the Mortgaged Property or encumbering any Property of Borrower, or
any Guarantor, which are on file in said office in the names of Borrower or any
Guarantor, except existing Liens in favor of Bank or to be assigned by Hibernia
to Bank.
3.03 Borrower's Corporate Documents. In addition to the other
conditions precedent described in Article III hereof, the obligation of Bank to
fund the Loan hereunder is subject to the receipt by Bank of documentation
(including articles of incorporation and bylaws, and all amendments thereto), in
Proper Form and certified by the Secretary of Borrower, which evidences that
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full power and authority to
conduct its business as a domestic corporation in the States of Delaware,
Oklahoma, Texas and Utah as it is now being conducted and as proposed to be
conducted.
3.04 Additional Information. In addition to the other conditions
precedent described in Article III hereof, the obligation of Bank to fund the
Loan is subject to the furnishing by Borrower or any Guarantor of such
additional documents, instruments and information as Bank and Bank's Counsel may
reasonably request from time to time.
IV. REPRESENTATIONS AND WARRANTIES
As an inducement to Bank to enter into this Agreement and to make the
Loan, Borrower certifies, represents and warrants to Bank as follows:
4.01 Legal Requirements. Borrower has full right, power and
authority to conduct the business of Borrower as presently conducted and is
in compliance with all applicable Legal Requirements.
4.02 Enforceable Obligations; Authorization. The Loan Docu-ments
executed by Borrower are legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency and other similar laws affecting creditors' rights
generally. The execution, delivery and performance of such Loan Documents are
within the right, power and authority of Borrower; do not and will not
contravene or violate any Legal Requirements; do not and will not result in the
breach of, or constitute a default under, any agreement or instrument by which
Borrower or any of Borrower's Property may be bound or affected; and do not and
will not result in the creation of any Lien upon any Property of Borrower except
as expressly contemplated in the Loan Documents. Any and all necessary
authorizations, permits, registrations, consents, waivers and approvals for such
making and performance have been heretofore obtained by Borrower. The Liens
created by the Deeds of Trust and the Financing Statements are and constitute
valid and perfected first and prior Liens on Borrower's interests in the
Mortgaged Property, subject to no other Liens whatsoever except Permitted
Encumbrances.
4.03 Other Debt. Borrower has no other Debt except as heretofore
disclosed in writing to Bank and is not in default in the payment of any other
Debt or in the performance under any agreement, mortgage, deed of trust,
security agreement, lease or other contract or instrument to which Borrower is a
party or to which Borrower or the Property of Borrower is subject.
4.04 Litigation. Except as heretofore disclosed in writing to Bank,
there is no litigation or administrative proceeding pending or, to the knowledge
of Borrower, threatened against, nor is there any outstanding judgment, order or
decree affecting, Borrower before or by any Governmental Authority. Except as
heretofore disclosed in writing to Bank, there are no outstanding judgment liens
against Borrower, and Borrower is not in default with respect to any judgment,
order or decree of any Governmental Authority.
4.05 Title. Borrower owns good and indefeasible title to its interests
in the Mortgaged Property, free and clear of all Liens except Permitted
Encumbrances and such Liens as created heretofore or contemporaneously herewith
by the Loan Documents.
4.06 Margin Securities. Borrower is not engaged principally, or as one
of Borrower's important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any extension of credit under this
Agreement will be used to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock. Neither
Borrower nor any Person acting on Borrower's behalf has taken any action that
might cause the transactions contemplated by this Agreement or the Note to
violate said Regulations G, T, U or X or to violate the Securities Exchange Act
of 1934, as amended.
4.07 Taxes. Borrower has filed all federal, state and local tax returns
and other reports that Borrower is required by the laws of any Governmental
Authority to file prior to the date hereof and which are material to the conduct
of Borrower's business, has paid or caused to be paid all taxes, assessments,
deficiencies, penalties, interest and other charges that are due and payable to
any Governmental Authority prior to the date hereof (except those being
contested in good faith by Borrower), and has made adequate provision for the
payment of such taxes, assessments, deficiencies, penalties, interest or other
charges accruing but not yet payable. Except for those heretofore disclosed in
writing to Bank, Borrower has no knowledge of any pending investigation of
Borrower by any Governmental Authority or of any pending but unassessed tax
liability of Borrower.
4.08 Accuracy of Statements, Representations and Warranties. No
representation, warranty or statement by Borrower contained in the Loan
Documents or in any certificate, affidavit or other document furnished or to be
furnished by Borrower or any Guarantor pursuant to this Agreement contains (or
shall contain with regard to any documents to be furnished) any untrue or
incomplete statement of a material fact or omits (or shall omit) to state a
material fact necessary to make such representation, warranty or sworn statement
not misleading in light of the circumstances under which it was made. There is
no fact known to Borrower which has or could have a material adverse effect, or
which might in the future have a material adverse effect, on the Property,
financial condition, business affairs or operations of Borrower that has not
been disclosed in writing to Bank. All representations and warranties of
Borrower contained in the other Loan Documents are incorporated in and made a
part of this Article IV for all purposes.
4.09 Principal Place of Business. The business address of
Borrower is 1250 N.E. Loop 410, Suite 205, San Antonio, Texas 78209.
4.10 ERISA. To the extent Borrower now or hereafter maintains an
employee benefit plan, Borrower is and shall always be and remain in compliance
with all applicable minimum funding requirements and all other applicable and
material requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and there are no existing conditions that would give rise to
liability thereunder. No Reportable Event (as defined in Section 4043 of ERISA)
has occurred in connection with any employee benefit plan that might constitute
grounds for the termination thereof by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States District Court of a
trustee to administer such plan.
4.11 Contracts and Leases. Borrower is not a party to, and neither
Borrower nor its Property is subject to, any agreement, condition, restriction,
covenant, contract or arrangement that might in the future have a material
adverse effect on the Property, financial condition, business affairs or
operations of Borrower. Borrower has not breached and is not in violation of any
covenant or condition in any of the Leases. No covenant or condition in any of
the Leases that may have been breached by any predecessor in title to either
Borrower remains unremedied.
4.12 Environmental Matters. Borrower and the Property of Borrower,
including the Mortgaged Property, are and shall always be and remain in
compliance with all applicable federal, state and local laws, rules, regulations
and ordinances relating to environmental matters, including, without limitation,
those described or referred to in any of the Deeds of Trust.
4.13 Gas Balancing Agreements. There are no gas balancing agreements or
other agreements, relationships or arrangements of any type, whether written or
oral, to which the interests of Borrower in the Leases and Hydrocarbons are
subject, that would at any time prevent Borrower from producing and selling for
its own account its share of Hydrocarbons or receiving payment at the full sales
price for its share of Hydrocarbons as and when Hydrocarbons are produced and
sold.
4.14 Tax Identification Number. The federal tax identification number
of Borrower is 13-3299127.
4.15 Delaware Organization Number. The organization or registration
number assigned by the Delaware Secretary of State to Borrower is 2070585.
V. AFFIRMATIVE COVENANTS
In addition to the covenants set forth in the Deeds of Trust with which
Borrower agrees to comply or cause compliance and which are incorporated in and
made a part of this Article V for all purposes, Borrower covenants and agrees
with Bank that from and after the date of this Agreement and prior to the
termination of this Agreement Borrower will do each and all of the following:
5.01 Taxes, Legal Requirements and Property Maintenance. At all times,
Borrower shall (a) pay or cause to be paid when due all taxes, assessments,
charges or levies of every kind imposed upon Borrower or against the income,
profits or Property of Borrower, unless and only to the extent that the same are
being or shall be contested in good faith by appropriate proceedings and that
reserves deemed adequate by Bank have been established and set aside therefor;
(b) comply with all applicable Legal Requirements in connection with the conduct
of Borrower's business and the ownership of Borrower's Property, (c) cause
Borrower's Property at Borrower's expense to be protected, maintained,
adequately insured and kept in good condition and repair (normal wear and tear
excepted), make or cause to be made all repairs, replacements and additions to
Borrower's Property as may be reasonably necessary to conduct Borrower's
business properly and efficiently, and pay and discharge or cause to be paid and
discharged when due the cost of such repairs, maintenance, replacements and
additions, and (d) pay or cause to be paid rentals on Borrower's Property on or
before the same become due.
5.02 Income Statements, Financial Statements and Infor-mation. Borrower
shall furnish or cause to be furnished to Bank such income statements, balance
sheets, financial statements, budgets, forecasts, tax returns and other
information, reports and statements in Proper Form relating to the financial
condition and business affairs of Borrower and/or any Guarantor as from time to
time may be requested by Bank.
5.03 Inspection. Borrower shall permit authorized representa-tives of
Bank to visit and inspect any of Borrower's Property, to examine Borrower's
non-confidential files, books and records and make copies thereof for Bank's own
files, and to discuss the business affairs, operations, finances and accounts of
Borrower with Borrower and Borrower's attorneys and accountants, all at such
reasonable times and intervals and to such extent as Bank may desire.
5.04 Further Assurances. Borrower shall promptly execute and deliver to
Bank any and all other and further instruments and do such other and further
acts as may be necessary or desirable or as may be reasonably requested by Bank
to cure any defect in the execution and delivery of any of the Loan Documents or
to describe more fully particular aspects of Borrower's agreements set forth in
the Loan Documents or so intended to be.
5.05 Books and Records. Borrower shall maintain books of record and
account in accordance with the cash basis of accounting and in which true, full
and correct entries will be made of all of Borrower's dealings, activities and
business affairs.
5.06 Notice of Certain Matters. Borrower shall notify Bank in writing
immediately upon acquiring knowledge of the occurrence of any of the following:
(a) the institution or threatened institution of any action, lawsuit or
administrative proceeding against Borrower or affecting Borrower's Property, (b)
the occurrence of any material adverse change in the financial condition,
business, operations or affairs of Borrower or any Guarantor, or (c) the
occurrence of any Event of Default or any Default; and Borrower shall also
notify Bank in writing at least thirty (30) days prior to the date that Borrower
changes its principal place of business.
5.07 Use of Proceeds. Borrower shall use the proceeds of the Loan
solely for the purposes specified in Paragraph 2.01 of this Agreement.
5.08 Mortgaged Property. With respect to the Mortgaged Property
and the Indebtedness, Borrower shall comply and remain in compliance with all
representations, warranties and covenants set forth in the Deeds of Trust.
5.09 Conduct of Business. Borrower shall conduct Borrower's business in
an orderly and efficient manner in accordance with good, sound business
practices, and Borrower shall conduct or cause to be conducted all operations
and other activities on the Leases pursuant to and in accordance with the terms
thereof, with due diligence and in a good and workmanlike manner, and as a
reasonably prudent operator would conduct such operations and activities.
5.10 Hydrocarbon Contracts. Prior to the occurrence of an Event of
Default, any Hydrocarbon sales contract into which Borrower may hereafter enter
with a Person for the purchase of Hydrocarbons produced or to be produced from
any portion of the Mortgaged Property at any time during the term of this
Agreement shall direct such Person to disburse Hydrocarbon sales proceeds and
revenues directly to Borrower and a copy of each such contract shall be
furnished promptly after execution to Bank. After the occurrence of an Event of
Default, any Hydrocarbon sales contract thereafter entered into by Borrower
shall direct the Person purchasing Hydrocarbons to disburse such proceeds and
revenues directly to Bank for the account of Borrower, and a copy of each such
contract shall be furnished promptly after execution to Bank.
5.11 Title Opinions and Title Curative. Upon request, Borrower shall
provide Bank with copies of all title opinions and title curative in Borrower's
files covering any portion of the Mortgaged Property to the extent Borrower has
not heretofore provided Bank with copies of such title opinions. Borrower agrees
to remove or cure, or cause to be removed or cured, at Borrower's expense and to
the reasonable satisfaction of Bank's Counsel, all Encumbrances (if any)
reflected in such title opinions (or in any title opinions heretofore furnished
to Bank) to be unsatisfied as Bank may request within 120 days after receipt of
Bank's request.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees with Bank that from and after the date of
this Agreement and prior to the termination of this Agreement Borrower will not
do or cause to be done any of the following:
6.01 Debt. Borrower shall not create, incur, suffer or permit to exist,
or assume or guarantee, directly or indirectly, or become or remain liable with
respect to, any Debt, whether direct, indirect, absolute, contingent or
otherwise, except the following: (a) Debt owing by Borrower to Bank; (b)
existing Debt secured by Liens permitted by Paragraph 6.02 hereof; (c) other
Debt existing on the date of this Agreement and heretofore disclosed in writing
to Bank (except Debt owing by Borrower to St. Mary Land & Exploration Company
which Borrower has agreed in this Agreement to use the loan proceeds of the Loan
to pay immediately such Debt in full), and all renewals and extensions (but not
increases) thereof, and (d) current accounts payable and unsecured current
liabilities, not the result of borrowing, to Persons providing services or
furnishing goods or materials in the ordinary course of business, and for
expenditures for goods, materials and services normally required by Borrower in
the ordinary course of business and on ordinary trade terms.
6.02 Liens. Without limiting the generality of Paragraph 6.01 above,
Borrower shall not create, incur, suffer or permit to exist or assume any Lien
upon any of Borrower's Property now owned or hereafter acquired, or acquire any
Property upon any sale and leaseback arrangement, any conditional sale or
pursuant to any title retention device or arrangement or any purchase money
security agreement, or in any manner directly or indirectly sell, assign, pledge
or otherwise transfer any of Borrower's accounts or contract rights; provided,
however, that Borrower may create or suffer to exist: (a) Liens that are
operator's liens or mechanics and materialmen liens arising in the ordinary
course of business, and Liens for taxes, assessments and other charges, but only
to the extent that either (i) payment of the Debt secured thereby shall be made
in full by Borrower before the same become delinquent or (ii) payment thereof is
being contested in good faith by Borrower and for which adequate reserves have
been established by Borrower to the satisfaction of Bank; (b) Liens in effect on
the date hereof and previously disclosed to Bank in writing, provided that the
Debt secured thereby shall never increase, and (c) Liens in favor of Bank (or
which are being acquired contemporaneously herewith by Bank) that have been
created by the Loan Documents.
6.03 Contingent Liabilities. Borrower shall not directly or indirectly
guarantee the performance or payment of, or purchase or agree to purchase, or
assume or contingently agree to become or be secondarily liable in respect of,
any obligation or liability of any other Person except for the endorsement for
collection of checks or other negotiable instruments in the ordinary course of
business and contingency obligations under an operating agreement that are
customarily accepted in the industry.
6.04 Loans and Investments. Borrower shall not make any loan, advance,
extension of credit or capital contribution to, or make or have any Investment
in, any Person, or purchase any stock, bonds, notes, debentures or other
securities issued by any Person, or make any commitment to make any such
extension of credit or Investment, except Permitted Investment Securities and
travel advances in the ordinary course of business.
6.05 Certificates and Affidavits. Borrower shall not furnish Bank any
certificate, affidavit, statement or other document that contains any
inaccurate, incomplete or untrue statement of material fact or that will omit to
state a material fact necessary to make the same not misleading in light of the
circumstances under which the same is furnished.
6.06 Other Business. Borrower shall not engage in any business
other than the business in which Borrower is presently engaged.
6.07 Dispositions of Mortgaged Property. Borrower shall not directly or
indirectly sell, convey, transfer, assign, farmout, lease, sublease, mortgage,
pledge or otherwise dispose of or encumber all or any part of the Mortgaged
Property (except Hydrocarbons in the ordinary course of business) without the
prior written consent of Bank, which may be granted or withheld in Bank's sole
discretion (which will not be unreasonably withheld if the proceeds of sale are
to be applied to reduce Indebtedness owing on the Note).
VII. EVENTS OF DEFAULT REMEDIES
7.01 Remedies upon Event of Default. Upon the occurrence of an Event of
Default, Bank may, without notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, notice of intent to
demand, protest or any other notices, formalities or demands of any kind (all of
which are hereby expressly waived by Borrower), do any or all of the following:
(a) declare the Note and any other Indebtedness to be, and thereupon the Note
and such other Indebtedness shall forthwith become, immediately due and payable,
together with all accrued interest thereon; (b) exercise Bank's rights of offset
against any account, including Borrower's Account, and all other Property of
Borrower in the possession of Bank, which right is hereby granted by Borrower to
Bank; and (c) exercise any and all other remedies, rights and powers available
to Bank at law or in equity or conferred upon Bank pursuant to the Loan
Documents.
7.02 Remedies Cumulative. All remedies, rights and powers available to
Bank at law or in equity or conferred upon Bank in this Agreement, the Note, the
Deeds of Trust, the Financing Statements, the guaranty agreements executed by
Guarantors, or any other instruments now or hereafter existing in connection
with or as security for the payment of the Note or any other Indebtedness
secured by the Deeds of Trust are and shall be cumulative one of the other and
not exclusive.
VIII. COLLECTION OF HYDROCARBON PROCEEDS
In connection with the Note and the Deeds of Trust, it is agreed and
provided as follows:
8.01 Payment of Hydrocarbon Proceeds. Notwithstanding certain of the
Loan Documents provide for Hydrocarbons, and the revenues and proceeds accruing
and to accrue (and payable and to be payable) with respect thereto, to be paid
directly to Bank, all of the same, for the present time and until the occurrence
of an Event of Default, shall be paid directly to Borrower. To effectuate the
foregoing, Bank hereby confers a license upon Borrower to collect all of the
revenues derived from the sale of Hydrocarbons so long as no Event of Default
shall have occurred. Borrower shall hold in trust for Bank all such revenues and
proceeds received during any calendar month until such revenues and proceeds are
endorsed and deposited by Borrower into Borrower's operating account
("Borrower's Account") at Bank. Borrower shall have authority at any time and
from time to time to withdraw or transfer to another account of Borrower at Bank
any revenues and proceeds deposited in the Borrower's Account, subject to the
other terms and conditions of this Agreement and the other Loan Documents.
Borrower shall deposit or cause to be deposited such revenues and proceeds into
Borrower's Account on or before the fifth day of the calendar month following
the month that the same are received by Borrower, and the failure or refusal of
Borrower to so deposit the same shall be deemed an Event of Default.
8.02 Revocation of License. Borrower's collection of all of the
revenues derived from the sale of Hydrocarbons prior to any occurrence of an
Event of Default shall not affect or impair the liens and security interests
created by the Deeds of Trust and the Financing Statements or the validity and
effect of the assignment of Hydrocarbons to Bank pursuant to the Deeds of Trust.
Upon the occurrence of an Event of Default, such license shall terminate and be
revoked and all proceeds derived from the sale of Hydrocarbons assigned to Bank
pursuant to the Deeds of Trust shall be paid directly to Bank; and Bank may at
such time notify any and all Persons purchasing Hydrocarbons (and such other
Persons as Bank deems prudent or necessary to notify) to pay all of such
proceeds directly to Bank.
8.03 Bank's Rights. Nothing herein contained shall impair or prejudice
the right of Bank to have delivered and paid to it after the occurrence of an
Event of Default the Hydrocarbons, revenues, proceeds and payments described in
and conveyed to Bank under certain of the Loan Documents; and any or all of the
same shall be delivered and paid directly to Bank at its banking quarters in San
Antonio, Bexar County, Texas after the occurrence of an Event of Default.
8.04 No Liability of Bank. Bank shall not be liable in any respect, and
none of the rights and Liens of Bank under the Loan Documents or any other
instruments as may be hereafter executed by Borrower in connection with or as
security for the payment of the Note or any Debt secured by the Loan Documents
are or shall be impaired or diminished by reason of any failure, delay, omission
or negligence of Bank in collecting any Hydrocarbons, revenues, proceeds or
payments herein mentioned or in taking or failing to take any action with
reference thereto.
8.05 Assignment and Security Agreement. As an inducement to Bank to
make the Loan, Borrower hereby assigns to Bank, and hereby grants to Bank a
security interest in, all of its respective rights, titles and interests in and
to Borrower's Account, all cash and property held from time to time in or in
respect of Borrower's Account and all proceeds of any and all of the foregoing
(collectively, the "Collateral") to secure the payment by Borrower to Bank of
all obligations of Borrower now or hereafter existing under the Loan Documents,
whether for principal, interest, charges, costs, fees, expenses or otherwise.
Borrower hereby authorizes Bank to file one or more financing or continuation
statements, and amendments thereto, in Proper Form relative to all or any part
of the Collateral or the Mortgaged Property without the signature of Borrower
where permitted by applicable Legal Requirements. If any Event of Default should
occur and be continuing, Bank may exercise with respect to the Collateral, in
addition to other rights and remedies provided for in this Agreement, in the
other Loan Documents or otherwise available to Bank, all the rights and remedies
of a secured party under applicable Legal Requirements. Borrower hereby
authorizes Bank to withdraw all or any portion of the cash in Borrower's Account
from time to time and apply the same in payment of any Debt of Borrower to Bank
under the Loan Documents.
8.06 Letters in Lieu of Division Orders. From time to time (including
before and/or after the occurrence of an Event of Default) and at any time upon
Bank's request, Borrower shall execute letters in lieu of division orders and/or
transfer orders in Proper Form addressed in blank and/or additional letters in
Proper Form addressed to all Persons currently or hereafter disbursing to
Borrower proceeds derived from the sale of Hydrocarbons produced from the
Mortgaged Property and to such other Persons as Bank deems prudent or
appropriate. With respect to any letters executed before the occurrence of an
Event of Default, Bank agrees not to mail, telefax, forward or otherwise
transmit or deliver such letters to any Person until such time (if ever) as an
Event of Default may occur. If an Event of Default occurs, Bank shall thereafter
from time to time and at any time have the right (but not the obligation) to
transmit or deliver such letters to any or all of such Persons.
IX. MISCELLANEOUS
9.01 No Waiver. No waiver by Bank of any Default or Event of Default
shall be deemed to be a waiver of any other Default or Event of Default. No
failure to exercise or delay in the exercise of any right or power conferred
upon Bank under any of the Loan Documents shall operate as a waiver thereof, and
the single or partial exercise of any such right or power shall not preclude any
further or other exercise thereof or the exercise of any other right or power of
Bank. No change, amendment, extension, modification, supplement or waiver of any
of the Loan Documents or any provision therein shall be effective unless the
same is in writing, making reference thereto, and signed by the Person against
whom such change, amendment, extension, modification, supplement or waiver is
sought to be enforced, except Bank may execute and/or file on behalf of itself
and/or Borrower financing statements, continuation statements, and amendments to
either as permitted by any Legal Requirement.
9.02 Notices. Any notice, consent, waiver or other communication
required, authorized or permitted to be given under this Agreement or any of the
other Loan Documents, except as may be otherwise provided herein or therein,
shall be in writing and shall be deemed to have been furnished when directed to
the party hereto to whom such notice, consent, waiver or other communication is
being given and (a) delivered in person, (b) deposited in the United States mail
by registered or certified mail, return receipt requested, postage prepaid, or
(c) sent by telecopy with telephone confirmation of receipt, as follows:
To Bank: The Frost National Bank
-------
P. O. Box 1600
San Antonio, Texas 78296
Telecopy No.: (210) 220-4626
Telephone No.: (210) 220-6905
Attention: Mr. W. Casey Shaeffer
To Borrower: Venus Exploration, Inc.
-----------
1250 N.E. Loop 410, Suite 205
San Antonio, Texas 78209
Telecopy No.: (210) 930-4901
Telephone No.: (210) 930-2118
Attention: Mr. Eugene L. Ames, Jr.
Either Bank or Borrower may change its address, telecopy number, telephone
number or the Person to whose attention notices, consents or other
communications are to be directed, but no such change shall be binding on any
other party hereto until written notice thereof has been furnished to the other
party in the manner stated above. The above telephone numbers are set forth
above solely for the purpose of confirming receipt of telecopy transmissions and
are not set forth for the purpose of furnishing notices, consents, waivers or
other communications.
9.03 Bank's Counsel; Reimbursement of Fees and Expenses. Borrower
acknowledges and understands that Bank's Counsel has acted and is acting as
legal counsel to Bank in connection with the loan transaction ("the Loan
Transaction") evidenced by this Agreement and the other Loan Documents, and that
Bank's Counsel has not represented and is not representing Borrower in
connection with the Loan Transaction. Borrower acknowledges that Borrower has
retained or been afforded the opportunity to retain its own legal counsel to
represent its interests in connection with the Loan Transaction. Within five (5)
Business Days of Bank's request or Bank's presentment of any statement by Bank's
Counsel, Borrower agrees to and shall reimburse Bank (or pay Bank's Counsel
directly if requested to do so by Bank) for all attorney's fees and
disbursements incurred by Bank in connection with the preparation of the Loan
Documents, the review of Hibernia's loan documents executed by Borrower in
connection with or relating to the LOC Note, the processing and closing of the
Loan Transaction and the Loan made pursuant to this Agreement, the review of any
title opinions and title documents, and the preparation of any title curative
instruments deemed necessary by Bank's Counsel to protect and preserve the Liens
of Bank created by the Loan Documents. Borrower also agrees (at Bank's option)
to advance to Bank or to reimburse Bank immediately upon receipt of a statement
or other notification for all filing fees and other costs and expenses incurred
by Bank in connection with the recording or filing of (a) the Note Assignment in
all counties in which the Deeds of Trust are recorded, together with UCC-3
assignments of the Financing Statements in the office of the Delaware Secretary
of State, (b) certain of the Loan Documents to perfect or perpetuate its liens
and security interests in the Mortgaged Property and (c) any title curative
instruments deemed reasonably necessary by Bank's Counsel to protect and
preserve the Liens of Bank created by the Loan Documents. Borrower's failure to
timely reimburse (or pay) such legal fees or timely advance or reimburse such
filing fees and other costs and expenses shall constitute and be deemed an
Option Termination Event under the Note Agreement and an Event of Default under
this Agreement and the other Loan Documents.
9.04 Applicable Law, Venue and Jurisdiction. NOTWITH-STANDING ANYTHING
IN ANY OF THE DEEDS OF TRUST TO THE CONTRARY (BUT SUBJECT TO CONFLICTS OF LAW
PRINCIPLES AS APPLICABLE TO ANY OF THE DEEDS OF TRUST AND THE ENFORCEMENT AND
FORECLOSURE OF LIENS AND SECURITY INTERESTS CREATED THEREBY), THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND SUBJECT TO THE LAWS OF THE STATE OF TEXAS AND THE UNITED
STATES OF AMERICA. AS BETWEEN BORROWER AND BANK, THE GOVERNING LAW PROVISIONS IN
THE DEEDS OF TRUST (AND ANY OF THE OTHER LOAN DOCUMENTS WHICH MAY PROVIDE FOR
THE LAWS OF A DIFFERENT STATE TO GOVERN) ARE HEREBY AMENDED TO THE EXTENT THAT
SUCH PROVISIONS MAY BE IN CONFLICT WITH THIS GOVERNING LAW PROVISION. This
Agreement shall be performable for all purposes in Bexar County, Texas. Courts
within the State of Texas shall have jurisdiction over any and all disputes
between Bank and Borrower, whether legal or equitable in nature, including, but
not limited to, any and all disputes arising out of or relating to this
Agreement or any of the other Loan Documents.
9.05 Waiver of Jury Trial. Borrower hereby expressly waives any right
to a trial by jury in any action or legal proceeding arising out of or relating
to this Agreement, the other Loan Documents or the transactions contemplated by
the Loan Documents.
9.06 Survival; Parties Bound. All representations, warranties,
covenants and agreements made by or on behalf of Borrower in connection herewith
shall survive the execution and delivery of the Loan Documents, shall not be
affected by any investigation made by any Person, shall bind Borrower and its
successors and assigns, and shall inure to the benefit of Bank and its
successors and assigns, provided that the undertaking of Bank hereunder to make
the Loan to Borrower shall not inure to the benefit of any successor or assign
of Borrower.
9.07 Usury Not Intended; Refund of Any Excess Payments. It is the
intent of Borrower and Bank in connection with the execution and performance of
this Agreement to contract in strict compliance with the usury laws of the State
of Texas and the United States of America from time to time in effect. In
furtherance thereof, Bank and Borrower stipulate and agree that none of the
terms and provisions contained in this Agreement or the other Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate in excess of the Highest Lawful Rate
and that for purposes hereof "interest" shall include the aggregate of all
charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Highest
Lawful Rate, Borrower and Bank shall, to the maximum extent permitted under
applicable law, (a) characterize any nonprincipal payment as an expense or fee
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) "spread" the total amount of interest throughout the entire
contemplated term of the Loans.
9.08 Headings and Captions. The headings and captions used in certain
of the Loan Documents are for convenient reference only and shall not in any way
affect the meaning or interpretation, and shall not be considered in construing,
the Loan Documents.
9.09 Expenses. Any provision to the contrary notwithstanding, and
whether or not the transaction contemplated by this Agreement shall be
consummated, Borrower shall pay or reimburse Bank for all out-of-pocket expenses
(including, without limitation, the fees and expenses of Bank's Counsel and
Bank's independent petroleum engineers as provided elsewhere herein) in
connection with the negotiation, preparation, execution, filing, recording,
re-filing, re-recording, modification, supplementing and waiver of the Loan
Documents and the making, servicing and collection of the Loan and any other
loan evidenced by or referred to in any of the Loan Documents.
9.10 Indemnification. BORROWER AGREES TO INDEMNIFY AND DEFEND, AND TO
HOLD HARMLESS, BANK FROM AND AGAINST ANY AND ALL LOSS, LIABILITY, OBLIGATION,
DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY AND EXPENSE (INCLUDING INTEREST,
PENALTIES, ATTORNEYS' FEES, LITIGATION EXPENSES AND AMOUNTS PAID IN SETTLEMENT)
TO WHICH BANK MAY BECOME SUBJECT ARISING OUT OF OR BASED UPON THE LOAN
DOCUMENTS, THE LOAN MADE HEREUNDER OR ANY OTHER LOAN EVIDENCED BY OR REFERRED TO
IN ANY OF THE LOAN DOCUMENTS. THE OBLIGATION OF BORROWER UNDER THIS PARAGRAPH
9.10 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE
INDEBTEDNESS.
9.11 Entire Agreement. This Agreement and the other Loan Documents
collectively encompass the final, entire agreement between Borrower and Bank and
supersede any and all prior proposals, commitments, agreements, representations
and understandings, whether written or oral, relating to the subject matter
hereof. The other Loan Documents are incorporated herein by reference.
9.12 Severability. If any term, covenant or condition of this Agreement
or of any of the other Loan Documents is declared invalid, illegal or
unenforceable in any respect by final decree of a court having jurisdiction, the
other terms, covenants and conditions herein and therein shall nevertheless
remain in full force and effect. In lieu of such invalid, illegal or
unenforceable term, covenant or condition, there shall be added automatically as
a part of the Loan Document a term, covenant or condition that is as similar as
possible to the one which is declared invalid, illegal or unenforceable and
still be valid, legal and enforceable.
9.13 Conflict Among Loan Documents. In the event any provision in the
Note is in conflict or is inconsistent with any provision in any of the other
Loan Documents (including this Agreement), such provision in the Note shall
prevail and control over the provision with which it is in conflict or
inconsistent. In the event any provision in this Agreement is in conflict or is
inconsistent with any provision in any of the other Loan Documents, except the
Note, such provision in this Agreement shall prevail and control over the
provision with which it is in conflict or inconsistent.
9.14 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code are specifically declared by
Borrower and Bank not to be applicable to this Agreement or any of the other
Loan Documents or to the transactions contemplated hereby.
9.15 Construction. Borrower and Bank acknowledge that each of them has
had the benefit of or the opportunity to retain legal counsel of its own choice
and has been afforded the opportunity to review this Agreement and the other
Loan Documents with its legal counsel, and that this Agreement and the other
Loan Documents shall be construed as if jointly drafted by Borrower and Bank.
9.16 Term. This Agreement shall be and remain in full force and effect
until the latter to occur of (a) May 30, 2003, (b) the final maturity of the
Note, (c) the payment of all amounts due under the Loan Documents, or (d) the
performance by Borrower of all obligations thereunder.
9.17 Amendment and Restatement. This Agreement is executed and
delivered by Borrower, and accepted by Bank, as an amendment to and restatement
of the Hibernia Loan Agreement. Pursuant to the Note Assignment, Hibernia has
assigned or is assigning contemporaneously herewith to Bank all rights, title
and interests of Hibernia in and to the Hibernia Loan Agreement, and Bank has
therefore succeeded to all rights of Hibernia thereunder. Effective as of the
date first typed above, this Agreement in all respects supersedes, replaces and
is in lieu of the Hibernia Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
VENUS EXPLORATION, INC.
By:________________________________
John Y. Ames
President
THE FROST NATIONAL BANK
By:________________________________
W. Casey Shaeffer
Vice President
THIS WRITTEN LOAN AGREEMENT REPRESENTS 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.
VENUS EXPLORATION, INC.
By:________________________________
John Y. Ames
President
THE FROST NATIONAL BANK
By:________________________________
W. Casey Shaeffer
Vice President
EXHIBIT "A"
Attached to and made a part of that certain
Amendment and Restatement of Loan Agreement
dated May 30, 2002, between
Venus Exploration, Inc. and The Frost National Bank
The "Deeds of Trust" referred to in the Amendment and Restatement of
Loan Agreement to which this Exhibit "A" is attached are more particularly
described as follows:
(1) That certain Oklahoma Mortgage, Security Agreement, Financing Statement
and Assignment of Production dated July 6, 2001, from Venus
Exploration, Inc. ("Borrower") to Hibernia National Bank, covering
certain of the Mortgaged Property situated in Grady, Latimer and
Seminole Counties, Oklahoma, multiple originals of which are recorded
in Book 3297, Page 117 of the records of Grady County, Oklahoma, in
Book 579, Page 430 of the records of Latimer County, Oklahoma, and in
Book 2385, Page 74 of the records of Seminole County, Oklahoma, as
modified by Partial Release dated May 10, 2002 (collectively, the "July
6, 2001 Oklahoma Mortgage"), to which instruments and the record
thereof reference is hereby made for all purposes;
(2) That certain Texas Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated July 6, 2001,
from Borrower to Lyndsay P. Job, Trustee for the benefit of Hibernia
National Bank, covering certain of the Mortgaged Property situated in
Atascosa, Crockett, Hansford, Jefferson and Wharton Counties, Texas,
multiple originals of which are recorded in Volume 174, Page 364 of the
Official Public Records of Atascosa County, Texas, in Volume 597, Page
529 of the Official Public Records of Crockett County, Texas, in Volume
284, Page 93 of the Official Records of Hansford County, Texas, under
Document No. 2001024467 of the Official Public Records of Real Property
of Jefferson County, Texas, and in Volume 419, Page 37 of the Official
Records of Wharton County, Texas (collectively, the "July 6, 2001 Texas
Mortgage"), to which instruments and the record thereof reference is
hereby made for all purposes;
(3) That certain Utah Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated July 6, 2001,
from Borrower to GeoScout Land & Title Company, Inc., as Trustee for
the benefit of Hibernia National Bank, covering certain of the
Mortgaged Property situated in Duchesne and Uintah Counties, Utah,
duplicate originals of which are recorded under Entry No. 347970, and
in Book A0353, Page 129, of the records of Duchesne County, Utah, and
under Entry No. 2001004623, and in Book 766, Page 809, of the records
of Uintah County, Utah (collectively, the "July 6, 2001 Utah
Mortgage"), to which instruments and the record thereof reference is
hereby made for all purposes;
(4) That certain Oklahoma Mortgage, Security Agreement, Financing Statement
and Assignment of Production dated September 27, 2001, from Borrower to
Hibernia National Bank, covering certain of the Mortgaged Property
situated in Blaine, Custer, Garfield, Latimer, Major, Pawnee, Payne and
Pittsburgh Counties, Oklahoma, multiple originals of which are recorded
in Book 833, Page 717 of the records of Blaine County, Oklahoma, in
Book 1145, Page 322 of the records in Custer County, Oklahoma, in Book
1555, Page 333 of the records of Garfield County, Oklahoma, in Book
583, Page 741 of the records of Latimer County, Oklahoma, in Book 1543,
Page 371 of the records of Major County, Oklahoma, in Book 543, Page
760 of the records of Pawnee County, Oklahoma, in Book 1323, Page 323
of the records of Payne County, Oklahoma, and in Book 1132, Page 417 of
the records of Pittsburgh County, Oklahoma (collectively, the
"September 27, 2001 Oklahoma Mortgage"), to which instruments and the
record thereof reference is hereby made for all purposes;
(5) That certain Texas Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated September 27,
2001, from Borrower to Lyndsay P. Job, Trustee for the benefit of
Hibernia National Bank, covering certain of the Mortgaged Property
situated in Jefferson County, Texas, recorded under Document No.
2001035621 of the Official Public Records of Real Property of Jefferson
County, Texas (the "September 27, 2001 Jefferson County Mortgage"), to
which instrument and the record thereof reference is hereby made for
all purposes;
(6) That certain Texas Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated September 27,
2001, from Borrower to Lyndsay P. Job, Trustee for the benefit of
Hibernia National Bank, covering certain of the Mortgaged Property
situated in Crane, Fort Bend, Hardin, Irion, Lipscomb, Panola and Upton
Counties, Texas, multiple originals of which are recorded in Volume
431, Page 478 of the Official Public Records of Crane County, Texas,
under Document No. 2001094231 of the Official Public Records of Fort
Bend County, Texas, in Volume 1286, Page 418 of the Official Public
Records of Hardin County, Texas, in Volume 142, Page 560 of the
Official Public Records of Irion County, Texas, in Volume 400, Page 286
of the Real Property Records of Lipscomb County, Texas, in Volume 1132,
Page 23 of the Official Public Records of Panola County, Texas, and
under Document No. 0128688 and recorded in Volume 711, Page 75 of the
Official Public Records of Upton County, Texas (collectively, the
"September 27, 2001 Texas Mortgage"), to which instruments and the
record thereof reference is hereby made for all purposes;
(7) That certain First Supplement and Amendment to Utah Deed of Trust,
Mortgage, Assignment, Security Agreement, Fixture Filing, and Financing
Statement dated October 15, 2001, but effective as of July 6, 2001,
from Borrower to GeoScout Land & Title, Inc., as Trustee for the
benefit of Hibernia National Bank, covering certain of the Mortgaged
Property situated in Duchesne County, Utah, recorded under Entry No.
350401, and in Book M0296, Page 632, of the records of said county (the
"October 15, 2001 Amendment"), to which instrument and the record
thereof reference is hereby made for all purposes;
(8) That certain Texas Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated November 1,
2001, from Borrower to Lyndsay P. Job, Trustee for the benefit of
Hibernia National Bank, covering certain of the Mortgaged Property
situated in Crockett and Jefferson Counties, Texas, duplicate originals
of which are recorded under Document No. 134982 and recorded in Volume
601, Page 512 of the Official Records of Crockett County, Texas, and
under Document No. 2001039301 of the Official Public Records of Real
Property of Jefferson County, Texas (collectively, the "November 1,
2001 Texas Mortgage"), to which instruments and the record thereof
reference is hereby made for all purposes;
(9) That certain Texas Deed of Trust, Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated May 21, 2002,
from Borrower to Lyndsay P. Job, Trustee for the benefit of Hibernia
National Bank, covering oil and gas properties of Borrower in Yoakum
County, Texas, as more particularly described therein;
(10) That certain UCC-1 Financing Statement filed in the office of the
Secretary of State of the State of Delaware on July 10, 2001 under File
No. 1066812 4 in said office (the "First Financing Statement"), to
which instrument and the filing thereof reference is hereby made for
all purposes;
(11) That certain UCC-1 Financing Statement filed in the office of the
Secretary of State of the State of Delaware on October 15, 2001 under
File No. 1139515 6 in said office (the "Second Financing Statement"),
to which instrument and the filing thereof reference is hereby made for
all purposes; and
(12) That certain UCC-1 Financing Statement filed in the office of the
Secretary of State of the State of Delaware on November 5, 2001 under
File No. 1160608 1 in said office (the "Third Financing Statement"), to
which instrument and the filing thereof reference is hereby made for
all purposes.