FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (hereinafter called the "Fourth
Amendment") executed as of the 29th day of March, 1995, by and between
MAYNARD OIL COMPANY, a Delaware corporation (hereinafter referred to as the
"Borrower") and BANK ONE, TEXAS, N.A., a national banking association
(hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower and First City, Texas-Dallas ("First City") entered
into a Credit Agreement dated as of October 1, 1990 (the "Loan Agreement")
under the terms of which Bank agreed to provide a term loan facility in the
amount of $10,000,000.00 to Borrower; and
WHEREAS, Borrower and First City entered into a First Amendment to Loan
Agreement, dated as of November 19, 1991 (the "First Amendment") amending the
Loan Agreement in certain respects as therein set forth; and
WHEREAS, on October 30, 1992, First City was taken over by the Federal
Deposit Insurance Corporation ("FDIC") in the FDIC's capacity as receiver;
and
WHEREAS, the FDIC, as receiver of First City, assigned to New First
City, Texas-Dallas, N.A. ("New First City") all of the rights of First City
in and to the Loan Agreement, First Amendment, note and the liens, security
interest and other collateral securing same (the "First City Debt"); and
WHEREAS, as of February 1, 1993, New First City assigned all of its
right, title and interest in and to the First City Debt to Lender; and
WHEREAS, Borrower and Lender entered into a Second Amendment to Loan
Agreement, dated as of February 1, 1993 (the "Second Amendment") amending the
Loan Agreement in certain respects as therein set forth; and
WHEREAS, Borrower and Lender entered into a Third Amendment to Loan
Agreement, dated as of December 22, 1994 (the "Third Amendment") amending the
Loan Agreement in certain respects as therein set forth; and
WHEREAS, Borrower has requested that the Lender extend the maturity,
increase the amount of the term loan and make certain other changes to the
Loan Agreement and the Bank is willing to extend, increase and amend such
commitment.
NOW, THEREFORE, the parties hereby agree to amend the Loan Agreement as
follows:
1. Unless otherwise defined herein, all defined terms used herein
shall have the same meaning ascribed to such terms in the Loan Agreement, as
amended by the First, Second and Third Amendments.
2. The definition of "Commitment" in Section 1.01 is hereby amended by
deleting the same in its entirety and inserting the following in lieu
thereof:
""Commitment" means $16,062,500.00."
3. The definition of "Oil and Gas Properties" in Section 1.01 is
hereby amended by deleting the same in its entirety and inserting the
following in lieu thereof:
""Oil and Gas Properties" means the properties set forth
on Exhibit AA together with any and all additional oil, gas
and mineral properties and interests in which Borrower has
granted and hereinafter grants to Bank first perfected Liens."
4. The definition of "Principal Payment Date" in Section 1.01 is
hereby amended by deleting the reference therein to "January 1, 1995" and
inserting in lieu thereof "April 1, 1995".
5. The definition of "Term Maturity Date" in Section 1.01 is hereby
amended by deleting the same in its entirety and inserting the following in
lieu thereof:
""Term Maturity Date" means April 1, 2000."
6. The definition of "Total Liabilities" in Section 1.01 is hereby
amended by deleting the same in its entirety and inserting the following in
lieu thereof:
""Total Liabilities" means Funded Debt, plus Current
Liabilities, minus Permitted Purchase Money Indebtedness,
minus Non Recourse Debt minus deferred Taxes plus all other
liabilities which would be reflected in a balance sheet
prepared in accordance with GAAP, of Borrower."
7. Section 3.04(a) of the Loan Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
"(a) Note. The unpaid principal balance of the Note
shall be due and payable in consecutive monthly installments,
with one such installment in the amount of $437,500 plus
accrued but unpaid interest due on April 1, 1995, followed by
consecutive installments of $781,250 plus accrued but unpaid
interest, payable on each Principal Payment Date thereafter,
beginning July 1, 1995 and continuing regularly thereafter,
with a final installment due and payable on the Term Maturity
Date in an amount equal to the outstanding principal balance
plus all accrued but unpaid interest."
8. Section 8.01 of the Loan Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
"8.01 Debt to Worth Ratio. Borrower will not
suffer or permit the ratio of (i) the aggregate of Total
Liabilities to (ii) Net Worth at any time to be greater
than 0.7 to 1.0."
9. The $16,062,500.00 Renewal Term Note (the "Note") attached hereto
as Exhibit "A" shall replace the $7,000,000.00 Term Note attached to the
Third Amendment to Loan Agreement as Exhibit "A".
10. This Fourth Amendment shall be effective as of the date first above
written (the "Effective Date").
11. The obligation of the Bank under this Fourth Amendment and its
obligation to increase and extend the Loan shall be subject to the following
conditions precedent:
(a) Execution and Delivery. Borrower shall have executed and
delivered to the Bank this Fourth Amendment, the Note, the Security
Documents, and other required documents, all in form and substance
satisfactory to the Bank;
(b) Legal Opinion. Bank shall have received from Borrower's legal
counsel a favorable legal opinion in form and substance satisfactory to
Bank, generally in the form of the opinion furnished in connection with
the execution of the Loan Agreement on October 1, 1990;
(c) Corporate Resolutions. Bank shall have received appropriate
certified corporate resolutions for the Borrower;
(d) Incumbency. The Bank shall have received a signed certificate
of the officers of Borrower, certifying the names of each of the
officers of Borrower authorized to sign loan documents on behalf of the
Borrower, together with the true signatures of each such officer. The
Bank may conclusively rely on such certificate until the Bank receives a
further certificate of the authorized officers of Borrower canceling or
amending the prior certificate and submitting signatures of the officers
named in such further certificate;
(e) Good Standing. The Bank shall have received evidence of good
standing of the Borrower issued by the Secretary of State of the State
of Delaware;
(f) Articles of Incorporation and Bylaws. The Bank shall have
received copies of the Articles of Incorporation of Borrower and all
amendments thereto, certified by the Secretary of State of the State of
Delaware and a copy of the bylaws of the Borrower and all amendments
thereto, certified by one or more officers of Borrower as being true,
correct and complete;
(g) Title. The Bank shall have received satisfactory evidence as
to the state of the title of the Oil and Gas Properties being mortgaged
to the Bank on the Effective Date;
(h) Other Documents. The Bank shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as the Bank or its counsel may reasonably request,
and all such documents shall be in form and substance satisfactory to
the Bank; and
(i) Legal Matters Satisfactory. All legal matters incident to the
consummation of the transactions contemplated hereby shall be
satisfactory to special counsel for the Bank retained at the expense of
Borrower.
12. Except to the extent its provisions are specifically amended,
modified or superseded by this Fourth Amendment, the representations,
warranties and affirmative and negative covenants of the Borrower contained
in the Loan Agreement are incorporated herein by reference for all purposes
as if copied herein in full. The Borrower hereby restates and reaffirms each
and every term and provision of the Loan Agreement, including, without
limitation, all representations, warranties and affirmative and negative
covenants.
All factual information heretofore and contemporaneously furnished by or
on behalf of Borrower to Lender for purposes of or in connection with this
Fourth Amendment does not contain any untrue statement of a material fact or
admit to state any material fact necessary to keep the statements contained
herein or therein from being misleading. Each of the foregoing
representations and warranties shall constitute a representation and warranty
of Borrower made under the Loan Agreement, and it shall be an Event of
Default if any such representation and warranty shall prove to have been
incorrect or false in any material respect at the time given. Each of the
representations and warranties made under the Loan Agreement (including those
made herein) shall survive and not be waived by the execution and delivery of
this Fourth Amendment or any investigation by Lender.
13. Except to the extent its provisions are specifically amended,
modified or superseded by this Fourth Amendment, the Loan Agreement, as
amended by the First and Second and Third Amendment, and all terms and
provisions thereof shall remain in full force and effect, and the same in all
respects are confirmed and approved by the Borrower and Bank.
14. The Borrower agrees to indemnify and hold harmless the Bank and its
officers, employees, agents, attorneys and representatives (singularly, an
"Indemnified Party", and collectively, the "Indemnified Parties") from and
against any loss, cost, liability, damage or expense (including the
reasonable fees and out-of-pocket expenses of counsel to an Indemnified
Party, including all local counsel hired by such counsel), relating to any
claim by a party other than the Borrower arising from or brought against any
Indemnified Party (i) as a result of or based on any action or omission of
the Borrower or its officers, directors, employees or agents and (ii) in
connection with or in any manner related to the Loan Agreement, as amended,
or any other loan document, the performance or breach of or the making of any
Advance or borrowing under the commitment in the Loan Agreement, the issuance
of any letter of credit or the use of the proceeds of any drawing thereunder,
the maintenance of any loan under the Loan Agreement, the consummation of the
transactions contemplated in the Loan Agreement, as amended, or in connection
herewith, the use of any of the proceeds of any loan under the Loan
Agreement, any claimed obligation or responsibility of any Indemnified Party
for the management, operation or conduct of the business or affairs of the
Borrower or the payment of any debt of the Borrower or any act or omission by
the Borrower, whether actual or alleged unless the action taken by the
Borrower is specifically demanded or required in writing by an Indemnified
Party after the Borrower has advised the Bank in writing of its opposition to
such action. In addition to the foregoing, the Borrower shall defend,
indemnify, and hold harmless each Indemnified Party from any and all
liabilities (including strict liability), actions, demands, penalties,
losses, costs, expenses (including, without limitation, reasonable attorneys'
fees and expenses and investigatory and remedial costs), suits, costs, any
settlement or judgment, and claims of any and every kind whatsoever which may
now or in the future be paid, incurred, or suffered by or asserted against
any Indemnified Party by any person or entity (other than the Borrower) or
governmental agency for, with respect to, or as a result or direct result of
any environmental liability which arises out of or result from the
environmental condition of any property owned by the Borrower or the
applicability of any environmental law or any rule, regulation, order or
decree related to any environmental law, regardless of whether caused by or
within the control of the Borrower or any Indemnified Party unless the action
taken by the Borrower is specifically demanded or required in writing by an
Indemnified Party after the Borrower has advised the Bank in writing of its
opposition to such action. The indemnity set forth herein shall be in
addition to any other obligations or liabilities of Borrower to the Bank
hereunder or at common law or otherwise, and shall survive any termination of
this Fourth Amendment, the expiration of the Revolving Loan Commitment and
the payment of all indebtedness of Borrower to any Indemnified Party
hereunder and under the Note, provided that Borrower shall have no obligation
under this paragraph to any Indemnified Party with respect to any of the
foregoing arising out of gross negligence or willful misconduct of such
Indemnified Party. THE PARTIES INTEND FOR THE PROVISIONS OF THIS PARAGRAPH
TO APPLY TO AND PROTECT EACH INDEMNIFIED PARTY FROM THE CONSEQUENCES OF ITS
OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR
CONCURRING CAUSE OF ANY SUCH LOSS, COSTS, LIABILITY, DAMAGE OR EXPENSE
INDEMNIFIED AGAINST IN THIS PARAGRAPH.
15. WRITTEN LOAN AGREEMENT. THE LOAN AGREEMENT, AS AMENDED BY THE
FIRST AMENDMENT, THE SECOND AMENDMENT, THE THIRD AMENDMENT AND THIS FOURTH
AMENDMENT, REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG 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 AND AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to
Loan Agreement to be duly executed as of the date first above written.
BORROWER:
MAYNARD OIL COMPANY
a Delaware corporation
By: ------------------------------------
Glenn R. Moore, President
LENDER:
BANK ONE, TEXAS, N.A.,
a national banking association
By: ------------------------------------
Michael W. Mitchell
First Vice President
EXHIBIT A
RENEWAL TERM NOTE
$16,062,500.00 Dallas, Texas March 29, 1995
FOR VALUE RECEIVED, the undersigned, MAYNARD OIL COMPANY, a Delaware
corporation (the "Borrower") hereby promises to pay to the order of BANK ONE,
TEXAS, N.A., a national banking association ("Payee"), at the offices of
Payee, 1717 Main Street, Dallas, Texas 75201, or at such other place as the
holder hereof may direct, in lawful money of the United States of America,
the principal amount of SIXTEEN MILLION SIXTY-TWO THOUSAND FIVE HUNDRED and
00/100 DOLLARS ($16,062,500.00), together with interest thereon from the date
hereof on the unpaid principal amount hereof from time to time outstanding at
the rates stated in that certain Loan Agreement, dated October 1, 1990, as
amended, entered into among Borrower and Payee (as the same may be amended,
modified, increased, supplemented and/or restated from time to time, the
"Agreement"). All terms defined in the Agreement shall have the same meaning
when used herein.
16. Payment Terms. The principal of, and all accrued interest upon,
this Note shall be due and payable in consecutive monthly installments, with
one such installment in the amount of $437,500.00 plus accrued and unpaid
interest payable on April 1, 1995, followed by consecutive installments of
$781,250.00 plus accrued but unpaid interest, payable on each Principal
Payment Date thereafter, beginning July 1, 1995, and continuing regularly
thereafter, with a final installment due and payable on April 1, 2000 in an
amount equal to the outstanding principal balance plus all accrued but unpaid
interest.
17. Prepayment. Borrower shall be entitled and in certain instances
may be required to prepay the principal of this Note from time to time in
accordance with the Agreement.
18. Benefits. This Note is a renewal, extension and increase of the
Term Note, in the amount of $7,000,000.00, executed by Borrower and payable
to the order of Payee, dated December 22, 1994, which Note renewed, extended
and increased a Term Note in the amount of $10,000,000.00 executed by
Borrower and First City, Texas-Dallas, N.A., dated October 1, 1990, which
Note was assigned to the Payee on February 1, 1993, and the holder hereof is
entitled to the benefits thereof and may enforce the agreements contained
therein and exercise the rights provided for thereby or otherwise in respect
thereof. Reference to the Agreement shall not affect or impair the absolute
unconditional obligation of Borrower to pay the principal of, interest on and
any additional payment in connection with this Note when due.
19. Security. The payment of this Note is secured by liens and
security interests more particularly described in the Agreement.
20. Acceleration of Maturity. Upon the occurrence of an Event of
Default under the Agreement, the holder of this Note, at its option, may (i)
declare the principal of, and all interest then accrued on, this Note, to be
forthwith due and payable, whereupon the same shall forthwith become due and
payable without presentment, demand, protest, or notice of any kind, all of
which Borrower hereby expressly waives, and/or (ii) exercise of any other
right provided in the Loan Documents, or at law or in equity. Reference is
hereby made to the Agreement for a statement of the events upon which the
maturity of this Note may be accelerated automatically. Borrower grants to
holder the right to set off against this Note, and the right of recoupment
from, any and all deposit and other liabilities of holder to Borrower and all
money or property in the possession of any holder held for or owed to
Borrower.
21. Waiver. Except as otherwise expressly provided herein or in the
other Loan Documents, Borrower and all sureties, endorsers and guarantors of
this Note (i) waive demand, presentment for payment, notice of intention to
accelerate, notice of acceleration, protest, notice of protest, notice of
default and all other notices, filing of suit and diligence in collecting
this Note or enforcing any of the security herefor, (ii) agree to any
substitution, exchange or release of any such security or the release of any
person or entity primarily or secondarily liable herefor, (iii) agree that it
will not be necessary for any holder hereof, in order to enforce payment of
this Note by such holder, to first institute suit or exhaust its rights
against Borrower or others liable herefor, or to enforce its rights against
any security herefor, and (iv) consent to any and all extensions for any
period, renewals or postponements of time of payment of this Note or any
other indulgences with respect hereto, without notice thereof to any of them.
22. Attorneys' Fees. If this Note is collected by legal proceedings or
in or through a bankruptcy court, or is placed in the hands of an attorney
for collection after maturity, no matter how maturity is brought about,
Borrower agrees to pay reasonable attorneys fees and all other collection
costs incurred by the holder of this Note.
23. GOVERNING LAW AND VENUE. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND APPLICABLE
FEDERAL LAW AND SHALL BE PERFORMABLE IN DALLAS COUNTY, TEXAS, OR AT SUCH
OTHER PLACE AS MAY BE DESIGNATED IN WRITING BY THE HOLDER HEREOF.
24. Headings. The headings of the sections of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
25. Renewal. This Renewal Term Note is given in renewal, increase and
extension of, and not in extinguishment of, that certain Term Note, in the
amount of $7,000,000.00, executed by Borrower and payable to the order of
Payee, dated December 22, 1994, which Note renewed and extended, but did not
extinguish that certain Term Note, dated October 1, 1990, executed by
Borrower payable to the order of First City, Texas-Dallas, N.A., Term Note
was assigned to Payee on February 1, 1993.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and
year first herein written.
BORROWER:
MAYNARD OIL COMPANY
By: -------------------------------------
Glenn R. Moore, President