Attached files
| file | filename |
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| EX-10.1 - SOUTH TEXAS OIL CO | v167849_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 20, 2009
South Texas Oil
Company
(Exact
name of Registrant as specified in its charter)
|
Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
001-33777
Commission
File
Number
|
74-2949620
(I.R.S.
Employer
Identification
No.)
|
|
300
East Sonterra Boulevard
Suite
1220
San Antonio,
Texas
(Address
of principal executive offices)
|
78258
(Zip
Code)
|
Registrant’s
telephone number, including area code: (210)
545-5994
(Former
name, former address and former fiscal year, if changed since last
report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry Into A Material Definitive
Agreement.
On
November 20, 2009, the U.S. Bankruptcy Court for the Western District of Texas
entered an Order granting South
Texas Oil Company, a Nevada corporation (the “Company”), and its wholly owned
subsidiaries Southern Texas Oil Company, a Texas corporation, STO
Drilling Company, a Texas corporation STO Operating Company, a Texas corporation
and its wholly owned subsidiary STO Properties LLC, a Texas limited liability
company (collectively, the
“Debtors”) authorization to enter into a DIP Loan with Giddings
Investments LLC (the “DIP Lender”) for up to $500,000. The DIP facility
authorization will provide immediate liquidity to the Company to help fund
operations during the bankruptcy proceedings, subject to customary conditions.
Pursuant to the Order,
Debtors entered into a
Debtor-in-Possession Note (the "DIP Note") with the DIP Lender.
The DIP Note provides for aggregate
post-petition loans of up
to $1,500,000. The use of proceeds under the DIP Note
must be made in accordance with the budget that the Company presented to the
DIP Lender, as required by the terms and conditions
of a Debtor-In-Possession Loan and Security Agreement (the “DIP Credit
Agreement”), executed contemporaneous with the DIP Note. The principal amount outstanding under
the DIP Note, plus interest accrued and unpaid thereon, will be due and payable
in full at maturity on
January 31, 2010.
Borrowings under the DIP Note bear
interest at the lesser of a
rate of ten percent (10%) per annum or the
highest lawful rate. Upon
the occurrence and during the continuance of an event of default as defined in the DIP Credit Agreement,
interest shall accrue at
the lesser of the non-default rate plus 5.00% per annum or the highest lawful rate. In addition to interest, the Debtors are
required to and have paid
a non-refundable commitment fee of $45,000 pursuant to the DIP Credit Agreement.
Obligations under the DIP Note and
related documents constitute "superpriority" claims under the Bankruptcy
Code, subject to certain
“carve outs” set forth in the Order with respect to carve out expenses specified
in the DIP Credit Agreement. The obligations are secured by a lien
in favor of the DIP
Lender on collateral
constituting a security interest in all of the Debtors' assets, including
property that is not subject to a security interest or lien as of the petition
date. In addition,
the Order grants to the DIP Lender valid, enforceable and perfected
first-priority priming security interests and liens of all assets of the Debtors
liens over any and all prepetition or postpetition liens and security
interests.
Most of
the Debtors' filings with the Bankruptcy Court are available to the public at
the offices of the Clerk of the Bankruptcy Court or the Bankruptcy Court's web
site (http://www.txwb.uscourts.gov) or may be obtained through private document
retrieval services.
The foregoing is qualified in its
entirety by reference to the DIP Note, a conformed copy of which is attached
hereto as Exhibit 10.1 and incorporated herein by reference.
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Item 2.03
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Creation of a
Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet
Arrangement of a
Registrant
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The information set forth under Item
1.01 of this Current Report on Form 8-K is hereby incorporated in this Item 2.03
by reference.
Item
9.01 Financial Statements and
Exhibits.
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Exhibit Number
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Description
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10.1
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Debtor-in-Possession Note dated
November
19,
2009
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Current Report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
November 27, 2009
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South
Texas Oil Company
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By:
/s/ Michael J. Pawelek
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Michael
J. Pawelek, Chief Executive Officer
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