Exhibit 10.16
FIRST AMENDMENT OF CREDIT AGREEMENT
THIS FIRST AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated as
of December 29, 1997, is by and among AMERICAN RIVERS OIL COMPANY, a Wyoming
corporation, KARLTON TERRY, individually, and JUBAL S. TERRY, individually
(collectively, "Borrower"), and VECTRA BANK DTC BRANCH ("Vectra"), formerly
known as Professional Bank.
RECITALS
A. Borrower and Professional Bank entered into a letter agreement
dated September 13, 1996 (the "Credit Agreement"), in order to set forth the
terms upon which Professional Bank would make available to Borrower a revolving
line of credit. Capitalized terms used herein but not defined herein shall have
the same meanings as set forth in the Credit Agreement.
B. Borrower and Vectra wish to enter into this Amendment in
order to amend certain terms and provisions of the Credit Agreement.
AMENDMENT
NOW, THEREFORE, in consideration of $10.00 and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Credit Agreement. The Credit Agreement shall be, and
hereby is, amended as follows of the date hereof:
(a) By changing all references therein to "Professional Bank" to
refer to "Vectra Bank DTC Branch f/k/a Professional Bank", and to incorporate
therein the definition of Vectra set forth in the first paragraph of this
Amendment.
(b) By substituting the following for clause (1) of Section
1.1(b) on page 1 of the Credit Agreement:
(1) make an Advance after September 12, 1997, except that,
on or about December 29, 1997, Vectra shall make a final Advance
(the "Final Advance") in the amount of $22,525.00, which shall
bring the outstanding principal balance of the Loan to
$540,000.00;
(c) By substituting the following for Section 1.3 on
page 1 of the Credit Agreement:
1.3. Mandatory principal payments from Borrower to Vectra
shall be required as set forth in Section 2.2 below. The entire
outstanding principal balance of the Loan, together with all accrued
interest and other amounts payable to Vectra hereunder or under the
Note, shall be due
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and payable, if not previously paid, on March 13,
1998.
(c) By inserting the following at the end of Section
1.4 on page 2 of the Credit Agreement:
In no event shall the proceeds of the Final Advance be used
for any purpose other than: (a) the payment to Vectra of accrued
interest on the Loan through January 1, 1998, (b) the payment of an
engineering fee currently owing to Kent Lina in the amount of
$2,540.00, (c) the payment to Vectra of a loan fee in the amount of
$2,700.00, and (d) the payment of legal fees due David G. Stolfa for
past legal services and services in connection with this Amendment in
the amount of $1,000.00.
(d) By substituting the following for Section 4.2(b) on
page 8 of the Credit Agreement:
(b) Additional Debt. AROC will not create, incur, assume or
permit to exist any outstanding debt, except: (1) the Loan, (2) trade
debt owed to suppliers, pumpers, mechanics, materialmen and others
furnishing goods or services to AROC in the ordinary course of AROC's
business, (3) debt as to which the obligee's repayment rights are
limited to specific items of property pledged by Borrower and as to
which the obligee has no recourse to the general credit of Borrower,
and (4) existing debt of Borrower shown on the financial statements
heretofore submitted by Borrower to Professional Bank.
(e) Exhibit B attached hereto shall be substituted for Exhibit B
attached to the Credit Agreement.
2. The Note. The Note shall be amended, such amendment to
be effected by an Allonge (the "Allonge"), between Borrower and Vectra,
to be attached to the Note and to be substantially in the form of
Exhibit A attached hereto and made a part hereof.
3. Loan Documents. All references in any document to the
Credit Agreement shall refer to the Credit Agreement, as amended
pursuant to this Amendment. All references in any document to the Note
shall refer to the Note, as amended pursuant to the Allonge.
4. Conditions Precedent. The obligations of the parties
under this Amendment are subject, at the option of Vectra, to the prior
satisfaction of the condition that Borrower shall have delivered to
Vectra the following (all documents to be satisfactory in form and
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substance to Vectra and, if appropriate, duly executed and/or acknowledged on
behalf of the parties other than Vectra):
(a) This Amendment.
(b) The Allonge.
(c) A Consent of Guarantor and Amendment of Guaranty in the form
of Exhibit C attached hereto and made a part hereof.
(d) Any and all other loan documents required
by the Bank.
5. Representations and Warranties. Borrower hereby certifies to Vectra
that, as of the date of this Amendment, all of Borrower's representations and
warranties contained in the Credit Agreement are true, accurate and complete in
all material respects, no Event of Default has occurred and no event has
occurred which, with the giving of notice, the lapse of time, or both, would
constitute an Event of Default.
6. Continuation of the Credit Agreement. Except as specified in this
Amendment, the provisions of the Credit Agreement shall remain in full force and
effect, and if there is a conflict between the terms of this Amendment and those
of the Credit Agreement or any other document executed and delivered in
connection therewith, the terms of this Amendment shall control.
7. Expenses. Borrower shall pay all reasonable expenses
incurred in connection with the transactions contemplated by this
Amendment, including without limitation all reasonable fees and
expenses of Vectra's attorney.
8. Miscellaneous. This Amendment shall be governed by and construed
under the laws of the State of Colorado and shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns. This
Amendment may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
EXECUTED as of the date first above written.
VECTRA BANK DTC BRANCH f/k/a
PROFESSIONAL BANK
By: /s/ James B. Bills
Vice President
AMERICAN RIVERS OIL COMPANY
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By: /s/ Richard E. Westerberg
President
By: /s/ Jubal S. Terry
Vice President
/s/ Karlton Terry
KARLTON TERRY
/s/ Jubal S. Terry
JUBAL S. TERRY
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EXHIBIT A
ALLONGE
FOR VALUE RECEIVED, AMERICAN RIVERS OIL COMPANY, a Wyoming
corporation, KARLTON TERRY, individually, and JUBAL S. TERRY, individually (all
of the foregoing being herein collectively called "Borrower"), and VECTRA BANK
DTC BRANCH f/k/a PROFESSIONAL BANK ("Vectra"), hereby amend the Promissory Note
dated September 13, 1996, in the face amount of $1,000,000, made by Borrower,
payable to the order of Professional Bank (the "Note"), as follows:
1. All references in the Note to "Professional Bank" or
"Payee" shall be deemed to refer to Vectra Bank DTC Branch formerly
known as Professional Bank; and
2. By substituting "March 13, 1998" for "September 13, 1997" as
the maturity date of the Note in line 4 of the third paragraph on page 1 of the
Note.
This Allonge is to be governed by and construed according to the laws
of the State of Colorado.
DATED as of December 29, 1997.
VECTRA BANK DTC BRANCH f/k/a
PROFESSIONAL BANK
By: /s/ James B. Bills
James B. Bills,
Vice President
AMERICAN RIVERS OIL COMPANY
By: /s/ Richard E. Westerberg
President
By: /s/ Jubal S. Terry
Vice President
/s/ Karlton Terry
KARLTON TERRY
/s/ Jubal S. Terry
JUBAL S. TERRY
A-1
EXHIBIT B
COMMITMENT AMOUNT
Time Period Commitment Amount
09/13/96 - 09/30/96 $1,000,000.00
10/01/96 - 10/31/96 $980,174.00
11/01/96 - 11/30/96 $960,405.00
12/01/96 - 12/31/96 $940,724.00
01/01/97 - 01/31/97 $921,130.00
02/01/97 - 02/28/97 $901,772.00
03/01/97 - 03/31/97 $882,347.00
04/01/97 - 04/30/97 $863,005.00
05/01/97 - 05/31/97 $843,743.00
06/01/97 - 06/30/97 $824,560.00
07/01/97 - 07/31/97 $805,455.00
08/01/97 - 08/31/97 $786,427.00
09/01/97 - 12/28/97 $767,475.00
12/29/97 - 03/12/98 $540,000.00
From and after 03/13/98 $0.00
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EXHIBIT C
CONSENT OF GUARANTOR
AND AMENDMENT OF GUARANTY
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, KARLTON TERRY OIL COMPANY ("Guarantor"), as the
guarantor under a Guaranty dated September 13, 1996 (the "Guaranty"), given by
Guarantor to Professional Bank, now known as Vectra Bank DTC Branch (the
"Bank"), to guaranty certain obligations of American Rivers Oil Company, Karlton
Terry and Jubal S. Terry (collectively, "Borrowers") to the Bank, hereby
consents to, and agrees with the Bank that the Guaranty shall be amended to
reflect, the transactions set forth in and contemplated by the First Amendment
of Credit Agreement dated as of December 29, 1997 (the "First Amendment"), among
Borrowers and the Bank, including without limitation: (1) the extension to March
13, 1998 of the final maturity date of the loan made pursuant to the Credit
Agreement (as defined in the First Amendment) at which time all then-outstanding
principal, interest, fees, expenses and other amounts payable in connection with
the Credit Agreement shall be due and payable in full, and (2) the provisions of
the First Amendment permitting Borrowers to receive, on or about December 29,
1997, a final advance of the loan made pursuant to the Credit Agreement.
The Guaranty shall be further amended by changing all references
therein to "Professional Bank" to refer to "Vectra Bank DTC Branch f/k/a
Professional Bank".
This Instrument may be executed in any number of counterparts, each of
which shall be an original and no one of which need be signed by all of the
parties, but all of which together shall constitute one and the same instrument.
Guarantor hereby ratifies the Guaranty, as amended hereby.
DATED as of December 29, 1997.
KARLTON TERRY OIL COMPANY
By: /s/ Karlton Terry
President
VECTRA BANK DTC BRANCH f/k/a
PROFESSIONAL BANK
By: /s/ James B. Bills
Vice President
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