FIRST AMENDMENT
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Introduction
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This FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "Amendment"), is dated as of December 18, 1997 and is entered
into by and between HONDO OIL & GAS COMPANY, a Delaware corporation (the
"Borrower"), and LONDON AUSTRALIAN & GENERAL PROPERTY COMPANY LIMITED, a United
Kingdom corporation (the "Lender"), as assignee of Thamesedge, Ltd.
Recitals
--------
The Borrower and the Lender (as assignee of Thamesedge Ltd.) are
parties to a Revolving Credit Agreement dated as of June 28, 1996, as same has
been amended and restated pursuant to an Amended and Restated Revolving Credit
Agreement dated as of July 2, 1997 (the "Existing Loan Agreement"), pursuant to
which there has been established a $20,500,000 revolving credit facility in
favor of the Borrower. Capitalized terms used and not otherwise defined or
amended in this Amendment shall have the meanings respectively assigned to them
in the Existing Loan Agreement.
The Borrower has requested that the Lender increase the Lender's
Commitment to $27,500,000 and $7,500,000 to cover potential interest that may be
added to principal pursuant to Section 2.05 of the Existing Loan Agreement. The
Lender is willing to so increase the Commitment based on the Borrower's
representation that, by October 1, 1998, the Lender shall have received a report
that Borrower's proved reserves will have increased to a minimum of 65,475,554
mcf and the Borrower's agreement that if its proved reserves fail to reach such
level, an Event of Default will occur.
The Borrower has requested that the Lender enter into this Amendment
in order to reflect the foregoing and certain other amendments to the Existing
Loan Agreement, and the Lender has agreed to do so, all upon the terms and
provisions and subject to the conditions hereinafter set forth.
Agreement
---------
In consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree as follows:
Section 1. Amendment to Existing Loan Agreement. The Existing Loan
Agreement is hereby amended as of the date first written above as follows:
(A) The definition of the terms "Agreement" , "this Agreement" and
"Lender" in the introductory paragraph are hereby amended to read as follows:
"Agreement" and "this Agreement" shall mean the Amended
and Restated Revolving Credit Agreement, together with all schedules
and exhibits thereto, as amended by the First Loan Amendment, and as
the same may be supplemented, modified, amended or restated from time
to time.
"Lender" shall mean London Australian & General Property
Company Limited, a United Kingdom corporation.
(B) In Section 1.01 of the Existing Loan Agreement, the definitions
of "Credit Documents" , "Guaranty" and "Note" are hereby deleted in their
entirety, and the following new definitions are hereby inserted in their
respective places:
"Credit Documents" means the Agreement, the Note, the
Guaranty and the Security Agreement.
"Guaranty" shall mean the Guaranty from the Guarantor to
the Original Lender dated as of July 2, 1997, as assigned by the
Original Lender to the Lender, as amended by the First Guaranty
Amendment and as the same may be supplemented, modified, amended or
restated from time to time.
"Note" shall mean the Amended and Restated Promissory Note
of the Borrower substantially in the form of Exhibit A to the First
Loan Amendment.
(C) In Section 1.01 of the Existing Loan Agreement, the following new
definitions of "First Guaranty Amendment", "First Loan Amendment", "First
Security Agreement Amendment", "Interest Advance", "Original Lender" and
"Security Agreement" are hereby inserted in their respective proper alphabetical
positions without the deletion or modification of any other material:
"First Guaranty Amendment" shall mean the First Amendment
dated as of December 18, 1997 to the Guaranty in substantially the
form of Exhibit B to the First Loan Amendment.
"First Loan Amendment" shall mean the First Amendment
dated as of December 18, 1997 to Amended and Restated Revolving
Credit Agreement between the Borrower and the Lender.
"First Security Agreement Amendment" shall mean the First
Amendment dated December 18, 1997 to the Security Agreement in
substantially the form of Exhibit C to the First Loan Amendment.
"Interest Advances" has the meaning set forth in Section
2.01.
"Original Lender" shall mean Thamesedge Ltd.
"Security Agreement" shall mean the Security Interest
Agreement dated May 13, 1997 between the Original Lender (and
assigned to Lender), the Borrower, Folio Trust Company Limited, a
Jersey company, and Folio Nominees Limited, a British Virgin Islands
company, as
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mended by the First Security Agreement Amendment and as the same may
be supplemented, modified, amended or restated from time to time.
(D) Section 2.01 of the Existing Loan Agreement is hereby deleted in
its entirety, and the following new section is hereby inserted in its place:
"SECTION 2.01 The Advances. The Lender agrees, on and
subject to the terms and conditions hereinafter set forth and
provided no Event of Default has occurred and is continuing, to make
advances (the "Advances") to the Borrower from time to time during
the period from the date hereof until the Termination Date in an
aggregate amount not to exceed at any time outstanding $35,000,000,
as such amount is reduced from time to time pursuant to Section 2.03
(the "Commitment"); provided, however, that $7,500,000 of the
Commitment may only be used to fund interest added to principal of
the note pursuant to Section 2.05 (the "Interest Advances"). Each
Advance shall be in an amount not less than $100,000. Within the
limits of the Commitment, the Borrower may borrow, prepay pursuant to
Section 2.04(a) and reborrow under this Section 2.01."
(E) Section 2.02 of the Existing Loan Agreement is hereby deleted in
its entirety, and the following new section is hereby inserted in its place:
"SECTION 2.02 Making the Advances. Each Advance (other
than an Interest Advance which shall be made by book entry) shall be
made on at least three Business Days notice from the Borrower to the
Lender specifying the date and amount thereof. Not later than 10:00
a.m., London time, on the date of such Advance and upon fulfillment
of the applicable conditions set forth in Article III, the Lender
will make such Advance available to the Borrower in immediately
available funds at such account and location as Borrower may
designate in writing."
(F) Section 2.03 of the Existing Loan Agreement is hereby deleted in
its entirety, and the following new section is hereby inserted in its place:
"SECTION 2.03 Optional and Mandatory Reductions of
Commitment. Without any notice to the Borrower or any other action by
an Person, the Commitment shall be automatically and permanently
reduced (i) by an amount equal to the aggregate principal amount of
the Advances repaid (or due but not repaid) pursuant to Section
2.04(c); and (ii) in accordance with Section 6.01."
(G) At the conclusion of Section 6.01(g) of the Existing Loan
Agreement, the following is hereby inserted:
"; and"
(H) In Section 6.01 of the Existing Loan Agreement, the following new
subsection (h) is hereby inserted at the end thereof without deletion or (except
as provided in clause (E) above) modification of any other material:
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"(h) the Borrower shall have failed to furnish to Lender, by October
1, 1998, a proved gas reserve report of Netherland, Xxxxxx &
Associates that shows that a minimum of 13,000,000 mcf (25%) of
proved gas reserve exists, which are subject to the Opon Association
Contract in which Hondo Xxxxxxxxx then participates, above the proved
gas reserve of 52,475,554 mcf at September 30, 1997."
(I) In Section 7.02 of the Existing Loan Agreement, the address of
the Lender is amended by deleting the present address and inserting the
following:
"if to the Lender, to it at London Australian & General Property
Company Limited, 0 Xxxxxxxxx Xxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx,
telephone 000-00-000-000-000, telecopier 011-44-171-201-6100,
Attention Xxxxx Xxxxxxx with a copy to Xxxxxxx X. Xxxxx, Esq. at 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, telephone 000-000-0000,
telecopy 000-000-0000;"
(J) Exhibit A to the Existing Loan Agreement is hereby deleted in its
entirety, and Exhibit A to this Amendment is hereby inserted in its place.
Section 2. Acknowledgment of Outstanding Loans. The Borrower hereby
acknowledges, certifies and agrees that: (a) pursuant to the Existing Loan
Agreement, the Lender has made loans to the Borrower that are outstanding as of
the date of this Amendment in the aggregate principal amount of $18,866,026.56
(including interest of $1,166,026.56 that has been added to principal in
accordance with Section 2.05 of the Agreement); and (b) the obligations of the
Borrower to repay those loans (with interest) to the Lender and to perform or
otherwise satisfy its other obligations, as well as the security interests in
the Collateral (as defined in the Security Agreement) granted by the Borrower to
the Lender in the Security Agreement and the obligations of the Guarantor in the
Guaranty: (i) each remain and shall continue in full force and effect, both
before and after giving effect to this Amendment, (ii) are not subject to any
defense, counterclaim, setoff, right of recoupment, abatement, reduction or
other claim or determination, and (iii) are and shall continue to be governed by
the terms and provisions of the Existing Loan Agreement and other Credit
Documents as supplemented, modified and amended by this Amendment.
Section 3. Bringdown of Representations, Etc. As of the date of this
Amendment, both before and after giving effect to the terms and provisions of
this Amendment, and both prior to and after giving effect to any requested
Advance: (a) the representations and warranties of the Borrower set forth in the
Existing Loan Agreement and in the Security Agreement and of the Guarantor set
forth in the Guaranty are true and correct in all material respects with the
same effect as though those representations and warranties had been made on and
as of the date hereof; (b) no Event of Default or Default has occurred and is
continuing; (c) the Board of Directors of the Borrower has duly authorized the
execution and delivery by the Borrower of the Existing Loan Agreement, the First
Loan Amendment and the First Security Agreement Amendment by the Borrower; (d)
the Board of Directors of the Guarantor and the Borrower, as sole shareholder of
the Guarantor (with authorization by the Board of Directors of the Borrower),
has authorized the execution and delivery by the Guarantor of the Guaranty and
the First Guaranty Amendment; and (e) there are no actions, suits or proceedings
pending or, to the best knowledge of the undersigned, threatened or contemplated
by any person for the liquidation, dissolution or bankruptcy of the Borrower or
the Guarantor or otherwise threatening their respective
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existences or challenging or calling into question the power or authority of the
Borrower or the Guarantor to execute or deliver any Credit Document to which it
is or will be a party or to perform any of its obligations thereunder.
Section 4. Counterparts. This Amendment may be signed in two or more
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one or more of the parties hereto, but all of
which, when taken together, shall constitute a single agreement binding upon all
of the parties hereto.
Section 5. Governing Law, Etc. Sections 7.06 ("Binding Effect";
Governing Law") and 7.09 ("Jurisdiction") of the Existing Loan Agreement are
incorporated herein by reference and shall pertain separately to this First Loan
Amendment as well as the Existing Loan Agreement and the Agreement.
Section 6. Agreement to Continue as Amended. The Existing Loan
Agreement, as supplemented, modified and amended by this Amendment, and the
other Credit Documents, as amended pursuant to the amendments and/or
restatements thereto being entered into contemporaneously herewith, shall remain
and continue in full force and effect after the date hereof.
Section 7. Entire Agreement. This Amendment contains the entire
agreement of the parties and supersedes all other representations, warranties,
agreements and understandings, oral or otherwise, among the parties with respect
to the matters contained in this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their respective officers thereunto duly
authorized. as of the date first above written.
HONDO OIL &GAS COMPANY
By: /s/ Xxxx X. Xxxx
--------------------------
Xxxx X. Xxxx
President
LONDON AUSTRALIAN & GENERAL
PROPERTY COMPANY LIMITED
By: /s/ R. E. Xxxxxxx
--------------------------
R. E. Xxxxxxx
Director
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EXHIBIT A
AMENDED AND RESTATED PROMISSORY NOTE
As of December 18, 1997 $35,000,000
FOR VALUE RECEIVED, the undersigned, HONDO OIL & GAS COMPANY, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
LONDON AUSTRALIAN & GENERAL PROPERTY COMPANY LIMITED, a United Kingdom
corporation (the "Lender"), on January 1, 1999 the principal sum of $35,000,000
or, if less than $35,000,000, the aggregate unpaid principal amount of all
Advances (as defined below) made by the Lender to the Borrower pursuant to the
Agreement (as defined below), together with all accrued but unpaid interest and
all interest added to the principal of this Note (as such has been and may be
supplemented, modified, amended or restated from time to time, "this Note").
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at the rate per annum equal at all times to 13% (or the maximum
interest rate permitted by law, whichever is less) on each October 1 and April 1
until maturity; provided, however, that any amount of principal on Advances that
are not paid when due (whether at stated maturity, by acceleration or otherwise)
shall bear interest from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum equal at all time to 18%
(or the maximum interest rate permitted by law, whichever is less).
As used herein, "Business Day" means any day of the year on which
banks are not required or authorized to close in London or Houston, Texas. All
computations of interest shall be made by the Lender on the basis of a year of
360 days and the actual number of days occurring in the period from which such
interest is payable. Whenever any payment hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest.
Both principal and interest are payable not later than 12:00 noon
London time on the day when due in lawful money of the United States of America
to the Lender at such account and place as Lender shall designate in immediately
available funds. Each Advance made by the Lender to the Borrower pursuant to the
Agreement, and all payments made on account of principal thereof, may, but need
not be recorded by the Lender on its books and records on the grid attached
hereto and such books and records shall be conclusive as to the existence and
amounts thereof absent manifest error. Failure to make any such entry or
endorsement shall not effect the actual principal amount outstanding or the
enforceability of this Note.
This Amended and Restated Note (i) has been issued by Borrower to
renew, extend, amend, restate and replace the Note dated July 2, 1997 issued by
Borrower in the principal amount of $20,500,000 (the "Prior Note"), (ii) is the
"Note" referred to in, and is entitled to the benefits of, the Amended and
Restated Revolving Credit Agreement between the Borrower and the Lender dated as
of July 2, 1997 (as same has been and may be supplemented, modified, amended or
restated from time to time, the "Agreement"), (iii) evidences all indebtedness
and other amounts outstanding from time to
time under the Agreement and (iv) although issued in substitution for and
restatement of the Prior Note, this Note shall not be deemed to have been issued
in payment, satisfaction, cancellation or novation of the Prior Note. The
Agreement, among other things: (1) provides for the making of advances (the
"Advances") by the Lender to the Borrower and (2) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments an account of principal hereof prior to the maturity
hereof upon the terms and conditions specified therein.
This Note is a renewal and replacement of that certain other note in
the amount of $20,500,000 from Borrower to Lender dated as of July 2, 1997
which, in turn, replaced a note in the amount of $13,500,000 from Borrower to
Lender dated June 28, 1996.
This Note is guaranteed by the Amended and Restated Guaranty of Hondo
Xxxxxxxxx Oil & Gas Limited dated July 2, 1997 (as the same has been and may be
supplemented, modified, amended or restated from time to time, the "Guaranty").
Payment of this note is secured pursuant to the Security Agreement
dated May 13, 1997 between the Lender, the Borrower, Folio Trust Company
Limited, a Jersey company, and Folio Nominees Limited, a British Virgin Islands
company (as the same has been and may be supplemented, modified, amended or
restated from time to time, the "Security Agreement").
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York (other than those that would defer to the
substantive laws of another jurisdiction). Without in any way limiting the
preceding choice of law, the parties intend (among other things) to thereby
avail themselves of the benefit of Section 5-1401 of the General Obligations Law
of the State of New York.
The Borrower hereby irrevocably submits to the jurisdiction of any
New York State or United States Federal court sitting in New York City over any
action or proceeding arising out of or relating to this Note or the Agreement,
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Borrower irrevocably consents to the service of any and all process in any
such action or proceeding by sending copies of such process to it at its address
and in the manner determined under Section 7.02 of the Agreement. The Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. The Borrower further waives any objections
to venue in such State and any objection to an action or proceeding in such
State on the basis of forum non conveniens. The Borrower further agrees that any
action or proceeding brought by it against the Lender shall be brought only in
New York State or United States Federal court sitting in New York County, New
York. The Borrower and the Lender waive any right it may have to jury trial.
Nothing herein shall affect the right of the Lender to serve legal
process in any other manner permitted by law or affect the right of the Lender
to bring any action or proceeding against the Borrower or any of its properties
in the courts of any other jurisdictions.
To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment,
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attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocable waives such immunity in respect
of its obligations under the Credit this Note, the Agreement and the Guaranty.
HONDO OIL & GAS COMPANY
By:
--------------------------
Xxxx X. Xxxx
President
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SCHEDULE TO NOTE
AMOUNT OF PRINCIPAL PRINCIPAL NOTATION
DATE ADVANCE PAID OUTSTANDING MADE BY
---- ------- ---- ----------- -------
12/18/97 Carryover from - $18,866,026.56
Prior Note
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EXHIBIT B
FIRST GUARANTY AMENDMENT
As of December 18, 1997
Hondo Xxxxxxxxx Oil & Gas Limited
c/o Hondo Oil & Gas Company
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Re: Guaranty
--------
Gentlemen:
As you know, London Australian & General Property Company Limited is in
the process of amending its existing Amended and Restated Revolving Credit
Agreement, dated as of July 2, 1997 (as currently in effect, the "Existing Loan
Agreement"), with Hondo Oil & Gas Company (the "Borrower"), which you guarantied
pursuant to your Guaranty executed and delivered as of July 2, 1997 (as
currently in effect, the "Existing Guaranty") in our favor (as assignee of
Thamesedge Ltd., the "Original Lender"). Under the proposed amendment, among
other things (a) the Commitment and, accordingly, the principal amount subject
to the Guaranty, is being increased to $35,000,000 (including $7,500,000 that
may represent interest added to principal), (b) an Event of Default is being
added to the Existing Loan Agreement to the effect that it shall be an Event of
Default if the Borrower shall have failed to furnish to Lender, by October 1,
1998, a proved gas reserve report of Netherland, Xxxxxx & Associates that shows
that a minimum of 13,000,000 mcf (25%) of proved gas reserve exists, which are
subject to the Opon Association Contract in which Hondo Xxxxxxxxx then
participates, above the proved gas reserve of 52,475,554 mcf at September 30,
1997 and (c) the definition of the term "Credit Documents" is being amended to
include that certain Security Agreement dated May 13, 1997, as amended as of the
date hereof (as same may be supplemented, modified, amended or restated from
time to time).
We understand that you have reviewed a copy of the final version of the
proposed First Amendment to the Existing Loan Agreement, including, without
limitation, the proposed Amended and Restated Promissory Note relating thereto
and the Security Agreement (collectively, the "Loan Agreement Amendments").
Capitalized terms used but not defined in this letter are used as they are
defined in the Existing Guaranty. For all purposes, "Guaranty" means the
Existing Guaranty, as modified by this letter, and as the same may be further
supplemented, modified, amended and restated from time to time in the manner
provided therein.
Please execute this letter to acknowledge your agreement to the Loan
Agreement Amendments and that your guarantee and other obligations under the
Guaranty remain and continue in full force and effect both before and after
giving effect to the Loan Agreement Amendments and related documentation
(including, without limitation, the matters set forth in this letter). Our
request to you
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Hondo Xxxxxxxxx Oil & Gas Limited As of December 18, 1997
in this instance does not obligate us to notify you or seek your consent in the
future as to any amendment or other matter where (pursuant to your Guaranty, or
otherwise) such notice or consent is not required.
Your signature, where indicated below, also will constitute your
acknowledgment of and agreement to the following modifications to the Existing
Guaranty (without limiting the prior paragraph of this letter):
i. London Australian & General Property Company Limited has
become the "Lender" for purposes of the Existing Loan
Agreement, as amended by the Loan Agreement Amendments,
the Guaranty and the other Credit Documents;
ii. The Guaranty now covers, among other things, all amounts
borrowed and to be borrowed (and interest thereon) under
the Existing Loan Agreement, as amended by the Loan
Agreement Amendments;
iii. You represent and warrant that your representations and
warranties set forth in the Existing Guaranty are true and
correct in all material respects on and as of the date of
this letter, after giving effect hereto, with the same
effect as though those representations and warranties had
been made on and as of the date hereof; and
iv. Section 7 of the Existing Guaranty is amended to read as
follows:
"SECTION 7. Consent to Jurisdiction; Waiver of Immunities.
(a) Guarantor hereby irrevocably submits to the
jurisdiction of any New York or federal court sitting in New York in
any action or proceeding arising out of or relating to this Guaranty,
and the Guarantor hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in
such New York or federal court. The Guarantor hereby irrevocably
waives, to the fullest extent they may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or
proceeding. The Guarantor hereby irrevocably appoints Xxxx X. Xxxx
(the "Process Agent"), with an office on the date hereof at Hondo Oil
& Gas Company, 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
telephone (000) 000-0000, telecopier (000) 000-0000, as its agent to
receive, on behalf of the Guarantor and its property, service of
copies of the summons and complaint and any other process that may be
served in any such action or proceeding. Such service may be made by
mailing or delivering a copy of such process to the Guarantor in care
of the Process Agent at the Process Agent's address above, and the
Guarantor hereby irrevocably authorizes and directs the Process Agent
to accept such service on its behalf. As an alternative method of
service, Guarantor also irrevocably consents to the service of any
and all process in any such action or proceeding by the mailing of
copies of such process to Guarantor at its address specified in
Section 11. Guarantor agrees that a final judgment in
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Hondo Xxxxxxxxx Oil & Gas Limited As of December 18, 1997
any such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Nothing in this Section shall affect the right of the
Lender to serve legal process in any other manner permitted by law or
affect the right of the Lender to bring any action or proceeding
against Guarantor or its property in the courts of any other
jurisdictions.
(c) To the extent that Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise)
with respect to Guarantor or its property, Guarantor hereby
irrevocably waives such immunity in respect of its obligations under
this Guaranty."
v. Notices, requests and demands to the Lender, as set forth
in Section 11 of the Existing Guaranty, shall be in
writing and shall be effective when delivered to the
Lender at London Australia & General Property Company,
Four Xxxxxxxxx Xxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx, telephone
011-44-171-201-6000, telecopier 011-44-171-201-6100,
Attention: R. E. Xxxxxxx, with a copy to Xxxxxxx X. Xxxxx,
Esq. at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
telephone 000-000-0000, telecopier 000-000-0000.
vi. This Guaranty shall be governed by the laws of the State
of New York (other than those that would defer to the
substantive laws of another jurisdiction). Without in any
way limiting the preceding choice of law, the parties
intend (among other things) to thereby avail themselves of
the benefit of Section 5-1401 of the General Obligations
Law of the State of New York.
Your signature, where indicated below, also will constitute your
acknowledgment of and agreement and certification that: (a) pursuant to the
Existing Loan Agreement, the Lender has made Advances (as defined) to the
Borrower that are outstanding as of the date of this letter in the aggregate
principal amount of $18,866,026.56 (including $1,166,026.56 of interest added to
principal); (b) the obligations of the Borrower to repay all Advances (including
those to be made pursuant to the Loan Agreement Amendments) with interest, to
the Lender and to perform or otherwise satisfy all other obligations, as well as
the security interests in the Collateral (as defined in the Security Agreement)
granted by the Borrower to the Lender, (i) each remain and shall continue in
full force and effect, both before and after giving effect to the transactions
contemplated by this letter, (ii) are not subject to any defense, counterclaim,
setoff, right of recoupment, abatement, reduction or other claim or
determination, and (iii) are and shall continue to be governed by the terms and
provisions of the Existing Loan Agreement and other Credit Documents, as amended
by the Loan Agreement Amendments and as same may be supplemented, modified,
amended or restated in the future; (e) your absolute, unconditional and
irrevocable guarantee to the Lender of the full and punctual payment and
satisfaction of the foregoing and any and all other obligations the Borrower (i)
remains and shall continue in full force and effect, both before and after
giving effect to the transactions contemplated by this letter, (ii) is not
subject to any defense, counterclaim, setoff, right of recoupment, abatement,
reduction or other
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Hondo Xxxxxxxxx Oil & Gas Limited As of December 18, 1997
claim or determination, and (iii) is and shall continue to be governed by the
terms and provisions of the Existing Guaranty and other Credit Documents as
supplemented, modified and amended.
Very truly yours,
LONDON AUSTRALIAN & GENERAL
PROPERTY COMPANY LIMITED
By: ___________________________
ACKNOWLEDGED AND AGREED:
HONDO XXXXXXXXX OIL & GAS LIMITED
__________________________________
