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EXHIBIT 10(b)
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of
May 31, 2001, is between SOUTH HAMPTON REFINING CO., a Texas corporation
("Borrower"), and SOUTHWEST BANK OF TEXAS, N.A., a national banking association
("Lender").
RECITALS:
A. Borrower and Lender entered into that certain Loan Agreement dated
as of September 30, 1999, as amended by First Amendment to Loan Agreement dated
as of June 20, 2000 (the "Agreement").
B. Pursuant to the Agreement, Texas Oil & Chemical Co. II, Inc., a
Texas corporation ("Guarantor") executed that certain Guaranty Agreement dated
as of June 20, 2000 (the "Guaranty") pursuant to which Guarantor guaranteed to
Lender the payment and performance of the Obligations (as defined in the
Agreement).
C. Borrower and Lender now desire to amend the Agreement as herein set
forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
Definitions
Section 1.1. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the meanings given to such
terms in the Agreement, as amended hereby.
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ARTICLE II.
Amendments
Section 2.1. Amendment to Certain Definitions. Effective as of date
hereof, the definition of each of the following terms contained in Section 1.1
of the Agreement is amended to read in its respective entirety as follows:
"Termination Date" means 11:00 a.m., Houston, Texas time on
July 31, 2001, or such earlier date on which the Commitment terminates
as provided in this Agreement.
Section 2.2. Amendment to Exhibits. Effective as of the date hereof,
Exhibit "A" (Note) to the Agreement is amended to conform in its entirety to
Annex "A" to this Amendment.
ARTICLE III.
Conditions Precedent
Section 3.1. Conditions. The effectiveness of this Amendment is subject
to the receipt by Lender of the following in form and substance satisfactory to
Lender:
(a) Resolutions-Borrower. Resolutions of the Board of
Directors of Borrower certified by its Secretary or an Assistant
Secretary which authorize the execution, delivery and performance by
Borrower of this Amendment and the other Loan Documents to which
Borrower is or is to be a party hereunder.
(b) Incumbency Certificate-Borrower. A certificate of
incumbency certified by the Secretary or an Assistant Secretary of
Borrower certifying the names and signatures of the officers of
Borrower authorized to sign this Amendment and each of the other Loan
Documents to which Borrower is or is to be a party hereunder.
(c) Certificates of Existence and Good Standing. Certificates
of the appropriate governmental officials regarding the existence and
good standing of Borrower in the state of Texas.
(d) Note. The Note executed by Borrower.
(e) Additional Information. Such additional documents,
instruments and information as Lender may request.
Section 3.2. Additional Conditions. The effectiveness of this Amendment
is also subject to the satisfaction of the additional conditions precedent that
(a) the representations and warranties contained herein and in all other Loan
Documents, as amended hereby, shall be true and correct as of the date hereof as
if made on the date hereof, (b) all proceedings, corporate or otherwise, taken
in connection with the transactions contemplated by this Amendment and all
documents, instruments and other legal matters incident thereto shall be
satisfactory to Lender, and (c) no Event of Default shall have occurred and be
continuing and
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no event or condition shall have occurred that with the giving of notice or
lapse of time or both would be an Event of Default.
ARTICLE IV.
Ratifications, Representations, and Warranties
Section 4.1. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement are ratified and confirmed
and shall continue in full force and effect. Borrower and Lender agree that the
Agreement as amended hereby shall continue to be the legal, valid and binding
obligation of such Persons enforceable against such Persons in accordance with
its terms.
Section 4.2. Representations, Warranties and Agreements. Borrower
hereby represents and warrants to Lender that (a) the execution, delivery, and
performance of this Amendment and any and all other Loan Documents executed or
delivered in connection herewith have been authorized by all requisite action on
the part of Borrower and will not violate the articles of incorporation or
bylaws of Borrower, (b) the representations and warranties contained in the
Agreement as amended hereby, and all other Loan Documents are true and correct
on and as of the date hereof as though made on and as of the date hereof, (c) no
Event of Default has occurred and is continuing and no event or condition has
occurred that with the giving of notice or lapse of time or both would be an
Event of Default, (d) Borrower is in full compliance with all covenants and
agreements contained in the Agreement as amended hereby, (e) Borrower is
indebted to Lender pursuant to the terms of the Note, as the same may have been
renewed, modified, extended and rearranged, including, without limitation,
renewals, modifications and extensions made pursuant to this Amendment, (f) the
liens, security interests, encumbrances and assignments created and evidenced by
the Loan Documents are, respectively, valid and subsisting liens, security
interests, encumbrances and assignments and secure the Note as the same may have
been renewed, modified or rearranged, including, without limitation, renewals,
modifications and extensions made pursuant to this Amendment, and (g) Borrower
has no claims, credits, offsets, defenses or counterclaims arising from the Loan
Documents or Lender's performance under the Loan Documents.
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ARTICLE V.
Miscellaneous
Section 5.1. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Documents including any Loan Document furnished in connection with this
Amendment shall fully survive the execution and delivery of this Amendment and
the other Loan Documents, and no investigation by Lender or any closing shall
affect the representations and warranties or the right of Lender to rely on
them.
Section 5.2. Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
Section 5.3. Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation and execution of this Amendment and the other
documents and instruments executed pursuant hereto and any and all amendments,
modifications and supplements thereto, including, without limitation, the costs
and fees of Lender's legal counsel, and all costs and expenses incurred by
Lender in connection with the enforcement or preservation of any rights under
the Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the costs and fees of Lender's legal counsel.
Section 5.4. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
SECTION 5.5. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN HOUSTON, XXXXXX COUNTY, TEXAS AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.6. Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender and Borrower and their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
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Section 5.7. Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 5.8. Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any covenant,
condition or duty by Borrower shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.9. Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.10. Document Imaging. Borrower and Guarantor, as applicable,
understands and agrees that (i) Lender's document retention policy involves the
imaging of executed loan documents and the destruction of the paper originals,
and (ii) Borrower or Guarantor, as applicable, waives any right that it may have
to claim that the imaged copies of the loan documents are not originals.
Section 5.11. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
BORROWER:
SOUTH HAMPTON REFINING CO.
By: /s/ XXXX XXXXXX
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Xxxx Xxxxxx
President
LENDER:
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ A. XXXXXXX XXXXXXX
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A. Xxxxxxx Xxxxxxx
Vice President
The undersigned Guarantor hereby consents and agrees to this Amendment
and agrees that the Guaranty Agreement executed by such person shall remain in
full force and effect and shall continue to be the legal, valid and binding
obligations of such Guarantor, enforceable against such Guarantor in accordance
with its terms and shall evidence such Guarantor's guaranty of the Note as
renewed and extended from time to time, including, without limitation, the
renewal and extension evidenced by the Note in substantially the form of Annex
"A" attached hereto.
TEXAS OIL & CHEMICAL CO. II, INC.
By: /s/ XXXX XXXXXX
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Xxxx Xxxxxx
President
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LIST OF ANNEXES
Annex Document
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A Note
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ANNEX "A"
Note
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PROMISSORY NOTE
$3,250,000.00 Houston, Texas May 31, 2001
FOR VALUE RECEIVED, the undersigned, SOUTH HAMPTON REFINING CO.,
a Texas corporation ("Maker"), hereby promises to pay to the order of SOUTHWEST
BANK OF TEXAS, N.A., a national banking association ("Payee"), at its offices at
Five Post Oak Park, 4400 Post Oak Parkway, Houston, Xxxxxx County, Texas, or
such other address as may be designated by Payee, in lawful money of the United
States of America, the principal sum of THREE MILLION TWO HUNDRED FIFTY THOUSAND
AND NO/100 DOLLARS ($3,250,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding principal
balance from day to day remaining, at a varying rate per annum which shall from
day to day be equal to the lesser of (a) the Maximum Rate (hereinafter defined)
or (b) the Prime Rate (hereinafter defined) of Payee in effect from day to day
plus one-half of one percent (.50%), and each change in the rate of interest
charged hereunder shall become effective, without notice to Maker, on the
effective date of each change in the Prime Rate or the Maximum Rate, as the case
may be; provided, however, if at any time the rate of interest specified in
clause (b) preceding shall exceed the Maximum Rate, thereby causing the interest
rate hereon to be limited to the Maximum Rate, then any subsequent reduction in
the Prime Rate shall not reduce the rate of interest hereon below the Maximum
Rate until the total amount of interest accrued hereon equals the amount of
interest which would have accrued hereon if the rate specified in clause (b)
preceding had at all times been in effect.
Principal of and interest on this Note shall be due and payable as
follows:
(a) Accrued and unpaid interest on this Note shall be payable
monthly, on the first (1st) day of each month commencing on June 1,
2001 and upon the maturity of this Note, however such maturity may be
brought about; and
(b) All outstanding principal of this Note and all accrued
interest thereon shall be due and payable on July 31, 2001.
Principal of this Note shall be subject to mandatory prepayment at the
times described in the Agreement (hereinafter defined). If an Event of Default
(hereinafter defined) has occurred and is existing, the principal hereof and any
past due interest hereon shall bear interest at the Default Rate (hereinafter
defined).
Interest on the indebtedness evidenced by this Note shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day) unless such calculation
would result in a usurious rate in which case interest shall be calculated on
the basis of a year of 365 or 366 days, as the case may be.
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As used in this Note, the following terms shall have the respective
meanings indicated below:
"Agreement" means that certain
Loan Agreement dated as of
September 30, 1999 between Maker and Payee, as amended by First
Amendment to
Loan Agreement dated as of June 20, 2000 and Second
Amendment to
Loan Agreement dated as of May 31, 2001, as amended and as
the same may be further amended or modified from time to time.
"Default Rate" means the lesser of (a) the sum of the Prime
Rate plus five percent (5.0%), or (b) the Maximum Rate.
"Event of Default" shall have the meaning given to such term
in the Agreement.
"Maximum Rate" means the maximum rate of nonusurious interest
permitted from day to day by applicable law, including Chapter 303 of
the Texas Finance Code (the "Code") (and as the same may be
incorporated by reference in other Texas statutes). To the extent that
Chapter 303 of the Code is relevant to any holder of this Note for the
purposes of determining the Maximum Rate, each such holder elects to
determine such applicable legal rate pursuant to the "weekly ceiling,"
from time to time in effect, as referred to and defined in Chapter 303
of the Code; subject, however, to the limitations on such applicable
ceiling referred to and defined in the Code, and further subject to any
right such holder may have subsequently, under applicable law, to
change the method of determining the Maximum Rate.
"Prime Rate" shall mean that variable rate of interest per
annum established by Payee from time to time as its prime rate which
shall vary from time to time. Such rate is set by Payee as a general
reference rate of interest, taking into account such factors as Payee
may deem appropriate, it being understood that many of Payee's
commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate charged to any customer and
that Payee may make various commercial or other loans at rates of
interest having no relationship to such rate.
This Note (a) is the Note provided for in the Agreement and (b) is
secured as provided in the Agreement. Maker may prepay the principal of this
Note upon the terms and conditions specified in the Agreement. Maker may borrow,
repay, and reborrow hereunder upon the terms and conditions specified in the
Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this Note or otherwise in connection with this loan transaction, the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors,
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successors or assigns of Maker shall be obligated to pay the excess amount of
such interest, or any other excess sum paid for the use, forbearance or
detention of sums loaned pursuant hereto. If for any reason interest in excess
of the Maximum Rate shall be deemed charged, required or permitted by any court
of competent jurisdiction, any such excess shall be applied as a payment and
reduction of the principal of indebtedness evidenced by this Note; and, if the
principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker. In determining whether or not the interest paid or
payable exceeds the Maximum Rate, Maker and Payee shall, to the extent permitted
by applicable law, (a) characterize any non-principal payment as an expense,
fee, or premium rather than as interest, (b) exclude voluntary prepayments and
the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
If default occurs in the payment of principal or interest under this
Note, or upon the occurrence of any other Event of Default, as such term is
defined in the Agreement, the holder hereof may, at its option, (a) declare the
entire unpaid principal of and accrued interest on this Note immediately due and
payable without notice, demand or presentment, all of which are hereby waived,
and upon such declaration, the same shall become and shall be immediately due
and payable, (b) foreclose or otherwise enforce all liens or security interests
securing payment hereof, or any part hereof, (c) offset against this Note any
sum or sums owed by the holder hereof to Maker and (d) take any and all other
actions available to Payee under this Note, the Agreement, the Loan Documents
(as such term is defined in the Agreement) at law, in equity or otherwise.
Failure of the holder hereof to exercise any of the foregoing options shall not
constitute a waiver of the right to exercise the same upon the occurrence of a
subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all costs,
expenses, and fees incurred by the holder, including all reasonable attorneys'
fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. THIS NOTE IS PERFORMABLE IN XXXXXX COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable
for payment of any sums of money payable on this Note jointly and severally
waive notice, presentment, demand for payment, protest, notice of protest and
non-payment or dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, grace, and all other
formalities of any kind, and consent to all extensions without notice for any
period or periods of time and partial payments, before or after maturity, and
any impairment of any collateral securing this Note, all without prejudice to
the holder. The holder shall similarly have the right to deal in any way, at
any time, with one or more of the foregoing
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parties without notice to any other party, and to grant any such party any
extensions of time for payment of any of said indebtedness, or to release or
substitute part or all of the collateral securing this Note, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party hereunder.
This Note is in renewal and extension of, but not in discharge or
novation of, that certain promissory note in the original principal amount of
$3,250,000.00, dated June 20, 2000, executed by Maker and payable to the order
of Payee, which was executed in renewal and increase of, but not in discharge or
novation of, that certain promissory note in the original principal amount of
$2,250,000.00, dated September 30, 1999, executed by Maker and payable to the
order of Payee.
SOUTH HAMPTON REFINING CO.
By: /s/ XXXX XXXXXX
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Xxxx Xxxxxx
President
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