Exhibit 10.20
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (this "Agreement") is entered into as of
September 19, 1995 by and among Oceanic Exploration Company, a Delaware
corporation ("OEC"), Oceanic International Properties Corporation, a Colorado
corporation and wholly-owned subsidiary of OEC ("OIPC"), and NWO Resources,
Inc., an Ohio corporation ("NWO").
WHEREAS, NWO extended a line of credit in the cumulative amount of
$2,000,000 in favor of OEC (the "Line of Credit"); and
WHEREAS, OIPC has executed and delivered to NWO six promissory notes
with a cumulative principal amount equal to $2,000,000, copies of which are
attached as Exhibit A, evidencing draws under the Line of Credit (the "Oceanic
Notes"); and
WHEREAS, OEC as debtor and NWO as creditor entered into a Security
Agreement, dated July 27, 1994, granting NWO a security interest in OEC's 15%
net earnings interest held through Xxxxxxx Mines Limited in certain areas
offshore Greece (the "Net Profits Interest") to secure payment of draws under
the Line of Credit (the "Security Agreement"); and
WHEREAS, OIPC is in default under the Oceanic Notes; and
WHEREAS, NWO and Oceanic entered into a letter agreement dated August
9, 1995 regarding the forbearance by NWO of collection of principal and interest
on the Oceanic Notes, the terms of which letter agreement are incorporated and
clarified herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby agree as follows:
1. FORBEARANCE. Subject to the terms of this Agreement, NWO will
forbear collection of principal or interest on the Oceanic Notes until December
31, 1996 and OEC shall use its best efforts to file a registration statement
with the Securities and Exchange Commission with respect to the rights offering
described below and use its best efforts to cause the registration statement to
become effective by December 31, 1995.
2. PAYMENTS ON OCEANIC NOTES. All proceeds from the Net Profits
Interest, including proceeds from the litigation in connection with the Net
Profits Interest (the "Xxxxxxx Proceeds") either before or after December 31,
1996 will first be applied by OEC and OIPC to paying accrued interest on the
Oceanic Notes. After all accrued interest has been paid on the Oceanic Notes
and prior to December 31, 1996, OEC may use up to $200,000 of the Xxxxxxx
Proceeds for general working capital purposes. All remaining Xxxxxxx Proceeds
will be applied by OEC and OIPC to paying accrued and unpaid interest and
outstanding principal on the Oceanic Notes.
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3. AMENDMENT TO SECURITY AGREEMENT. Contemporaneously with the
execution of this Agreement, OEC and NWO will enter into an amendment to the
Security Agreement in the form attached as Exhibit B.
4. INTEREST RATE. As of August 9, 1995, each of the Oceanic Notes
is hereby amended to provide for interest to accrue at a rate of 8.25% per
annum.
5. XXXXXXX LITIGATION. OEC shall diligently pursue its pending
lawsuit against Xxxxxxx Mines, Ltd. In order to enable OEC to diligently pursue
such lawsuit, NWO agrees to make advances to Oceanic to pay legal fees reflected
in statements received by OEC subsequent to August 1, 1995 in connection with
the litigation up to $100,000 (the "NWO Advances"). The NWO Advances shall be
made from NWO to OEC within 30 days of receiving a copy of the statement
evidencing such legal fees.
6. RIGHTS OFFERING. OEC will use its best efforts to raise
approximately $600,000 of working capital, less offering costs, to pay
litigation, administrative and other operating costs by making a rights offering
to its stockholders consisting of rights to acquire an aggregate of 6,000,000
shares at a purchase price of $.10 per share or an aggregate purchase price of
$600,000.
7. REIMBURSEMENT OF NWO ADVANCES. OEC agrees to reimburse NWO for
the NWO Advances together with interest thereon computed at the annual rate of
10% upon receipt of the proceeds of the rights offering referred to in paragraph
"6" above or January 31, 1996, whichever occurs earlier.
8. EXPENSES. Each of the parties to this Agreement will bear its
own expenses in connection with the negotiation and consummation of the
transactions contemplated by this Agreement.
9. GOVERNING LAW. This Agreement shall be construed under and
governed by the laws of the State of Colorado.
10. NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered, telegraphed or
mailed by certified or registered mail to the addresses previously provided by
each party or to such other address of which any party may notify the other
party.
11. COMPLETE AGREEMENT. This Agreement, including the Exhibit
referred to herein, is complete; and all promises, representations,
understandings, warranties and agreements with reference to the subject matter
hereof, and all inducements to the making of this Agreement relied upon by all
the parties hereto, have been expressed herein or in said Exhibit.
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12. BINDING EFFECT. This Agreement shall be binding upon, and shall
be enforceable by and inure to the benefit of, the parties named herein and
their respective successors and assigns.
13. SEVERABILITY. The failure of any of the parties to this
Agreement to require the performance of a term or obligation under this
Agreement or the waiver by any of the parties to this Agreement of any breach
hereunder shall not prevent subsequent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach hereunder. In case any one or more
of the provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision or part of a provision had never been
contained herein.
14. DISCLOSURE. Except as may be deemed necessary by OEC to comply
with applicable securities laws, no press releases or any public disclosures,
either written or oral, of the transactions contemplated by this Agreement shall
be made without the prior knowledge and written consent of the parties hereto.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
16. ATTORNEY FEES. In the event there is a default under this
Agreement and it becomes necessary for any party to enforce his rights
hereunder, then with or without litigation, the prevailing party shall be
entitled to his expenses, including reasonable attorneys' fees, arising out of
such enforcement of his rights hereunder.
17. AMENDMENT. This Agreement may be modified only by an agreement
in writing and signed by the party against whom enforcement of any waiver,
changes, modification or discharge is sought.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
OEC:
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OCEANIC EXPLORATION COMPANY
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: President
OIPC:
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OCEANIC INTERNATIONAL
PROPERTIES CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: President
NWO:
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NWO RESOURCES, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Secretary / Treasurer
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