FIFTH AMENDMENT TO FIRST
AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amendment to First Amended and Restated Credit Agreement (the
"Amendment") is made and entered into as of December 29, 2000, between AMERICAN
RESOURCES OFFSHORE, INC. ("ARO"), and BLUE DOLPHIN EXPLORATION COMPANY ("BDEX").
W I T N E S S E T H:
WHEREAS, American Resources Offshore, Inc., Southern Gas Co. of Delaware,
Inc. ("Southern"), Den norske Bank, ASA ("Den norske Bank") and DNB Energy
Assets, Inc. ("DNB") entered into that certain Third Amendment to First Amended
and Restated Credit Agreement dated as of August 1, 1999 ("Third Amendment");
WHEREAS, pursuant to the Third Amendment, ARO executed a certain promissory
note dated August 1, 1999 in the original principal amount of $51,223,000 made
payable to the order of Den norske Bank (the "$51,223,000 Note");
WHEREAS, a Note Purchase Agreement dated November 11, 1999 was entered into
by and between DNB, Den norske Bank, BDEX and Fidelity Oil Holdings, Inc.
("Fidelity") ("Note Purchase Agreement");
WHEREAS, pursuant to the Note Purchase Agreement, BDEX is the owner and
holder of the $51,223,000 Note and all rights of Den norske Bank under the Loan
Documents (defined below);
WHEREAS, BDEX agreed, in exchange for ARO undertaking certain obligations
under the terms of the Note Purchase Agreement, to reduce the amount of the
indebtedness previously evidenced by the $51,223,000 Note to the principal
amount of $5,000,000;
WHEREAS, ARO and BDEX entered into that certain Fourth Amendment to First
Amended and Restated Credit Agreement dated as of December 2, 1999 ("Fourth
Amendment");
WHEREAS, pursuant to the Fourth Amendment, ARO executed a certain
promissory note dated December 2, 1999 in the original principal amount of
$5,000,000 made payable to the order of BDEX ("Replacement Note");
WHEREAS, third parties have initiated the Subject Litigation (defined
below);
WHEREAS, ARO denys that the Subject Transaction Occurrences and Events
(defined below) give rise to any liability to third parties.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties set forth in this Amendment, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms "DNB", "Den
norske Bank", "Southern", "ARO", "BDEX", "Note Purchase Agreement", "Third
Amendment", "Fourth Amendment", "Replacement Note" and "$51,223,000 Note" shall
have the meaning assigned to such term hereinabove.
1.02 Additional Definitions. As used herein the following terms shall
have the meanings specified below unless the context otherwise requires:
a. "Amended Replacement Note" shall mean a promissory note by ARO to
BDEX of even date with this Amendment in the form of Exhibit A.
b. "Collateral Documents" shall mean the liens, assignments and
security interests evidenced, created and/or perfected pursuant to the Loan
Documents, including, but not limited to, the instruments described in
Exhibit A to the Note Purchase Agreement.
c. "Credit Agreement" shall mean the First Amended and Restated
Credit Agreement dated November 1, 1997 by and between ARO, Southern Gas
Co. of Delaware, Inc. and DNB as amended by the First Amendment to First
Amended and Restated Credit Agreement dated March 5, 1998, the Second
Amendment to First Amended and Restated Credit Agreement dated October 1,
1998, the Third Amendment to First Amended and Restated Credit Agreement
dated August 1, 1999 between ARO, Den norske Bank and DNB and the Fourth
Amendment to the First Amended and Restated Credit Agreement and this Fifth
Amendment to First Amended and Restated Credit Agreement.
d. "Event of Default" shall have the same meaning as set forth in
Article VIII.
e. "Investment Agreement" shall mean that certain Investment
Agreement dated as of July 30, 1999 between ARO and BDEX.
f. "Loan Documents" shall mean the Amended Replacement Note, Credit
Agreement and Collateral Documents, together with all documents,
instruments and agreements executed in connection therewith including,
without limitation, the mortgages and security agreements.
g "Related Interests" shall mean all liens, assignments, security
interests, rights and remedies arising under or relating to the Loan
Documents.
h "Release Determination Date" Provided that no additional
litigation arising
out of or related to the subject matter of the Subject Litigation is filed
against ARO or its officers, employees, directors, and agents based upon
the Subject Transactions, Occurrences and Events prior to the release
and/or dismissal with prejudice of all claims and causes of action asserted
against ARO, its officers, employees, directors and agents in the Subject
Litigation, then the Release Determination Date shall be the date on which
all claims and causes of action asserted against ARO, its officers,
employees, directors and agents in the Subject Litigation are released
and/or dismissed with prejudice. In the event that additional litigation
arising out of or related to the subject matter of the Subject Litigation
is filed against ARO or its officers, employees, directors and agents based
upon the Subject Transactions, Occurrences and Events prior to the release
and/or dismissal with prejudice of all claims and causes of action asserted
against ARO, its officers, employees, directors and agents in the Subject
Litigation, then the Release Determination Date shall be the date on which
all claims and causes of action asserted against ARO, its officers,
employees, directors and agents in the Subject Litigation and the
additional litigation are released and/or dismissed with prejudice.
i. "Subject Litigation" shall mean the cases styled (i) District
Court No. 5:00-cv-00421; Bankruptcy Court No. 95-50894; Adversary No. 98-
5023; In Re Xxxxxx Enterprises, Debtor, Xxxxx X. Xxxx, Trustee,
Plaintiff/Appellant, vs. Southern Gas Company, Inc., Southern Gas Co.,
Alpha Gas Development of Texas, Inc., Alpha Gas Development, Inc., Southern
Gas Holding Company, Inc., Southern Gas Co. of Delaware, Inc., American
Resources of Delaware, Inc., Xxxx Avare, Xxxxx Xxxxxxxxx, Xxxxxxx X. Xxxx
XX, and Xxx X. Xxxxxxx, Defendants/Appellees; in the United States District
Court for the Eastern District of Kentucky at Lexington and (ii) Case
Number H-00-1371; H&N Gas, Limited Partnership, and Xxxxxx Energy
Marketing, L.L.C. v. Xxxxxxx X. Xxxx, et al; in the United States District
Court, Southern District of Texas.
j. "Subject Transactions Occurrences and Events" shall mean all
actions, facts, matters or things, regardless of whether in the past,
present or future, and regardless of whether now known or unknown which
directly or indirectly arise out of or incidental to, or in any manner
connected with the facts plead or disclosed in discovery and the claims
made or that could have been made in the Subject Litigation.
ARTICLE II
CONDITIONS
2.01 The obligations of BDEX to amend the Credit Agreement as provided
herein is subject to satisfaction of the following conditions precedent:
a. Receipt of Loan Documents and Other Items. BDEX shall have
received multiple counterparts, as requested by BDEX, of the following
documents and other items, appropriately executed when necessary and in
form and substance satisfactory to BDEX:
(i) this Amendment executed by ARO;
(ii) the Amended Replacement Note in partial renewal and
modification, but not in full discharge or novation of the
Replacement Note, executed by ARO; and
(iii) such other agreements, documents, instruments, opinions,
certificates, waivers, consents, and evidence as BDEX may
reasonably request.
b. Matters Satisfactory to BDEX. All matters incident to the
consummation of the transactions hereby contemplated shall be reasonably
satisfactory to BDEX.
c. Consents and Litigation. ARO shall have obtained all required
third party consents to the transactions contemplated by this Amendment and
all statutory requirements for valid consummation of the transactions
contemplated by this Amendment shall have been fulfilled and all necessary
governmental consents, approvals or reauthorizations shall have been
obtained. There shall not have been filed or threatened any suit, action
or other proceeding (including any investigation of any governmental
agency) to restrain or invalidate the transactions contemplated by this
Amendment and no order, writ, injunction, or decree shall have been entered
or be in effect that restrains, enjoins or limits the transactions
contemplated by this Amendment.
d. Supporting Documents. BDEX and its counsel shall receive
reasonably satisfactory evidence that ARO has full power and authority and
has taken all corporate actions necessary to execute and deliver this
Amendment and consummate the transactions contemplated hereby and perform
all of its obligations hereunder.
ARTICLE III
ACKNOWLEDGMENT
ARO acknowledges and agrees that as of the date of this Agreement, after
giving effect to all payments, the unpaid principal balance due and owing on the
Replacement Note was $5,000,000, net of all claims and offsets.
ARTICLE IV
RATIFICATION OF LIENS
ARO hereby adopts, ratifies and confirms the Credit Agreement and the other
Loan Documents, in all things in accordance with the terms and provisions
thereof as amended. ARO hereby confirms and agrees that any and all mortgages,
liens, security interests and other security or collateral acquired by BDEX
pursuant to the Note Purchase Agreement (which excludes the property conveyed by
ARO to Fidelity pursuant to the Property Purchase and Sale Agreement)
and/or Assignment of Note, Claims, Liens, Security Interests and Other Rights
(subject to the Partial Release of Lien) as security for payment and performance
of the ARO Indebtedness hereby are renewed and carried forth to secure payment
and performance of the Amended Replacement Note.
ARTICLE V
CONDITIONAL RELEASE
Subject to strict adherence to the terms and conditions contained in this
Amendment, if the Subject Transactions, Occurrences and Events do not constitute
or give rise to or result in the occurrence of an Event of Default, BDEX agrees
to execute and deliver to ARO a release of the obligation evidenced by the
Amended Replacement Note on the Release Determination Date. All liens created
pursuant to the Loan Documents and this Agreement shall remain in effect after
release of the Amended Replacement Note to secure the performance by ARO of its
obligations under the Note Purchase Agreement. Provided that no Event of
Default has occurred, BDEX shall, on the Release Determination Date, release
the liens created pursuant to the Loan Documents and this Amendment. Time is of
the essence with respect to the satisfaction of the obligations and requirements
set forth in this Amendment. Any right to a release created by this Amendment
terminates immediately upon the occurrence of an Event of Default. No credit
against or discount on the Amended Replacement Note shall be earned by partial
performance of the requirements.
ARTICLE VI
MORATORIUM
Prior to the occurrence of an Event of Default of the type described in
Section 7.01 of this Agreement, BDEX will forbear from exercising or enforcing
any right under the Credit Agreement.
ARTICLE VII
EVENTS OF DEFAULT
7.01 Events of Default During the Moratorium Period. During the moratorium
period provided for in Article VI, the occurrence of any one or more of the
following events shall constitute an Event of Default:
a. Any representation, warranty, certification or statement by ARO
in this Amendment or in any certificate or other document delivered
pursuant to this Amendment shall prove to have been incorrect in any
material respect when made or deemed to have been made and is not cured by
ARO within ten (10) business days after written notice thereof has been
given to ARO by BDEX.
b. Any representation, warranty, certification or statement by ARO
in the Investment Agreement or in any certificate or other document
delivered pursuant to the Investment Agreement shall prove to have been
incorrect in any material respect when made or deemed to have been made as
a result of or based upon the Subject Transactions, Occurrences and Events.
c. If not released pursuant to Article V, the failure of ARO to pay
when due the full indebtedness evidenced by the Amended Replacement Note.
d. The failure of ARO to timely satisfy its obligations to Den norske
Bank under the Note Purchase Agreement.
7.02 Events of Default After Expiration of Moratorium Period. Upon
termination of the moratorium period provided for in Article VI, Events of
Default shall include those set forth in the Credit Agreement.
7.03 Remedies. Upon the occurrence of an Event of Default of the type
described in Section 8.01 (i) the moratorium period provided pursuant to Article
VI shall terminate immediately, without notice, demand or presentment, all of
which are hereby waived, and (ii) any right pursuant to Article V shall
terminate immediately, without notice, demand or presentment, all of which are
hereby waived. In addition to any other provision of this Amendment or any Loan
Document, BDEX shall have all rights, remedies and recoveries now or hereafter
existing in equity, at law or by virtue of statute or otherwise.
ARTICLE VIII
MISCELLANEOUS
8.01 Credit Agreement as Amended. All reference to the Credit Agreement in
any document heretofore or hereafter executed in connection with the
transactions contemplated in the Credit Agreement shall be deemed to refer to
the Credit Agreement as amended by this Amendment.
8.02 Parties in Interest. All provisions of this Amendment shall be
binding upon and shall inure to the benefit of ARO and BDEX and their respective
successors and assigns.
8.03 Rights of Third Parties. All provisions herein are imposed solely and
exclusively for the benefit of ARO and BDEX and no other person shall have
standing to require satisfaction of such provisions in accordance with their
terms and any or all of such provisions may be freely waived in whole or in part
by BDEX at any time if in its sole discretion it deems it advisable to do so.
8.04 Indemnification. As additional consideration to the execution,
delivery, and performance of this Amendment by the parties hereto and to induce
BDEX to enter into this Amendment, ARO hereby agrees to indemnify, hold
harmless, and defend each of the Released
Parties from and against any and all Claims of any nature or character, at law
or in equity, known or unknown, which may have arisen prior to the date hereof,
or accrued to, or could be claimed or asserted by, any third party prior to the
date hereof, INCLUDING WITHOUT LIMITATION, ANY CLAIMS ARISING OUT OF OR IN ANY
MANNER ATTRIBUTABLE TO THE NEGLIGENCE (SOLE, CONCURRENT, ORDINARY OR OTHERWISE),
OF ANY OF THE RELEASED PARTIES. Notwithstanding any provision of this Amendment
or any other Loan Document, this section shall remain in full force and effect
and shall survive the delivery and payment of the Amended Replacement Note, this
Amendment and the other Loan Documents and the making, extension, renewal,
modification, amendment or restatement of any thereof. Notwithstanding the above
language, this indemnification shall not be deemed to impair or be applicable to
ARO's rights to assert a claim against the Released Parties which may result
from a breach by BDEX of the Investment Agreement
8.05 ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND SUPERSEDES ANY
PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES REGARDING THE
SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS AMENDMENT, THE CREDIT
AGREEMENT, THE REPLACEMENT NOTE, THE SECURITY INSTRUMENTS, AND OTHER WRITTEN
DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENT OR EXECUTED IN CONNECTION WITH OR
AS SECURITY FOR THE AMENDED REPLACEMENT NOTE REPRESENT, COLLECTIVELY, THE FINAL
AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
8.06 GOVERNING LAW. THIS AMENDMENT AND THE AMENDED REPLACEMENT NOTE SHALL
BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
8.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED, AT THE SOLE
DISCRETION AND ELECTION OF BDEX, IN COURTS HAVING SITUS IN HOUSTON, TEXAS. ARO
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN
HOUSTON, TEXAS, AND HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE
THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY BDEX IN
ACCORDANCE WITH THIS SECTION.
IN WITNESS WHEREOF, this Fifth Amendment to the First Amended and Restated
Credit Agreement is executed as of the date first hereinabove written.
AMERICAN RESOURCES OFFSHORE, INC.
By: /s/X.X. Xxxxxx
--------------
Name: X.X. Xxxxxx
Title: Vice President
BLUE DOLPHIN EXPLORATION COMPANY
By: /s/Xxxxx Xxxxx
--------------
Name: Xxxxx Xxxxx
Title: Vice President, Treasurer
FIFTH AMENDMENT TO FIRST
AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBITS
EXHIBIT 99A Amended Replacement Note
EXHIBIT A
AMENDED REPLACEMENT NOTE
$5,000,000.00 Houston, Texas December 29, 2000
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned American Resources
Offshore, Inc. (successor by merger to American Resources of Delaware, Inc.)
("Maker") promises to pay to the order of Blue Dolphin Exploration Company
("Payee"), at its office at 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, the
sum of FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00).
Reference is hereby made to the First Amended and Restated Credit Agreement
dated November 1, 1997 by and between ARO, Southern Gas Co. of Delaware, Inc.
and DNB Energy Assets, Inc. as amended by the (i) First Amendment to First
Amended and Restated Credit Agreement dated Xxxxx 0, 0000, (xx) Second Amendment
to First Amended and Restated Credit Agreement dated October 1, 1998, (iii)
Third Amendment to First Amended and Restated Credit Agreement dated August 1,
1999 between ARO, Den Norske Bank and DNB Energy Assets, Inc., (iv) Fourth
Amendment to First Amended and Restated Credit Agreement dated effective as of
December 2, 1999 between ARO and Blue Dolphin Exploration Company, and (v) Fifth
Amendment to First Amended and Restated Credit Agreement dated effective as of
December 1, 2000 between ARO and Blue Dolphin Exploration Company (as the same
may be further amended, supplemented, or restated from time to time,
collectively the "Credit Agreement"), for matters governed thereby, including,
without limitation, certain events which will entitle the holder hereof to
accelerate the maturity of all amounts due hereunder. Capitalized terms used
but not defined in this Amended Replacement Note shall have the meanings
assigned to such terms in the Credit Agreement.
This Amended Replacement Note is payable in full on the earlier of (i) the
occurrence of an Event of Default, or (ii) December 31, 2005. Prior to the
occurrence of an Event of Default as defined in the Fifth Amendment to First
Amended and Restated Credit Agreement dated effective December 1, 2000, interest
shall not accrue on the principal amount of this Amended Replacement Note.
Subject to compliance with applicable provisions of the Credit Agreement, Maker
may at any time pay the full amount or any part of this Amended Replacement Note
without the payment of any premium or fee, but such payment shall not, until
this Amended Replacement Note is fully paid and satisfied, excuse the payment as
it becomes due of any payment on this Amended Replacement Note provided for in
the Credit Agreement.
This Amended Replacement Note is issued in renewal and modification, but
not in novation or discharge, of the principal balance of that certain
Replacement Note dated December 2, 1999 in the original principal amount of
$5,000,000 made payable to the order of Blue Dolphin Exploration Company
("Replacement Note"). The Replacement Note was issued in partial renewal and
modification, but not in novation or discharge, of the remaining principal
balance of that certain Promissory Note, dated August 1, 1999, in the original
principal amount of $51,223,000 made payable to the order of Den Norske Bank
(the "$51,223,000 Note"). The
$51,223,000 Note was issued in partial renewal and modification, but not in
novation or discharge, of the remaining principal balance of those three certain
promissory notes dated March 5, 1998, in the original principal amount of
$1,500,000, $15,000,000 and $75,000,000 from Maker and Southern Gas Co. of
Delaware, Inc. ("Southern") to DNB Energy Assets, Inc. ("DNB"), which promissory
notes were in renewal and extension, but not novation or discharge of that
certain promissory note dated November 1, 1997, in the original principal amount
of $75,000,000 from Maker and Southern jointly to Den Norske Bank, which
promissory note was in renewal and extension, but not novation or discharge of
that certain promissory note dated September 28, 1995, in the original principal
amount of $20,000,000 from Maker and Southern jointly to Den Norske Bank, which
promissory note was in renewal and extension, but not in novation or discharge
of that certain promissory note dated August 14, 1995, in the original principal
amount of $15,000,000 from Maker and Southern jointly to Bank One, Texas,
National Association ("Bank One"), which promissory note was in renewal and
extension, but not in novation or discharge of that certain promissory note
dated March 27, 1995, in the original principal amount of $20,000,000 from Maker
and Southern to Bank One, which promissory note was in renewal and extension,
but not in novation or discharge of that certain promissory note dated February
24, 1994 in the original principal amount of $7,375,000 from Maker and Southern
jointly to Bank One, which promissory note was in renewal and extension, not
novation or discharge of that certain promissory note dated March 24, 1993, in
the original principal amount of $3,500,000 from Southern Gas Holding Company,
Inc., Southern Gas Company, Inc. and Alpha Gas Development, Inc. jointly to
National American Life Insurance Company of Pennsylvania.
Without being limited thereto or thereby, this Amended Replacement Note is
secured by the Loan Documents (as that term is defined in the Fifth Amendment to
First Amended and Restated Credit Agreement dated effective December 1, 2000).
If any sum payable under this Amended Replacement Note or under the Credit
Agreement is not paid when due (whether the same becomes due by acceleration or
otherwise) and this Amended Replacement Note is placed in the hands of an
attorney for collection or enforcement of this Amended Replacement Note or the
Credit Agreement, or if this Amended Replacement Note is collected through any
legal proceedings, including, but not limited to suit, probate, insolvency or
bankruptcy proceedings, Maker agrees to pay all reasonable attorneys' fees and
all expenses of collection and costs of court.
It is the intention of the parties hereto to comply with applicable usury
laws; accordingly, notwithstanding any provision to the contrary in this Amended
Replacement Note, the Credit Agreement, or in any of the documents securing
payment hereof or otherwise relating hereto, in no event shall this Amended
Replacement Note, the Credit Agreement, or such documents require the payment or
permit the collection of interest in excess of the maximum amount permitted by
such laws. If any such excess of interest is contracted for, charged, taken,
reserved or received under this Amended Replacement Note or under the terms of
any of the documents securing payment hereof or otherwise relating hereto, or in
the event the maturity of the indebtedness evidenced by this Amended Replacement
Note is accelerated in whole or in part, or in the event that all or part of the
principal or interest of this Amended Replacement Note shall be prepaid, so
that under any of such circumstances the amount of interest contracted for,
charged or received under this Amended Replacement Note or under any of the
instruments securing payment hereof or otherwise relating hereto, on the amount
of principal actually outstanding from time to time under this Amended
Replacement Note shall exceed the maximum amount of interest permitted by
applicable usury laws, then in any such event (a) the provisions of this
paragraph shall govern and control, (b) any such excess which may have been
collected shall at final maturity of said indebtedness either be applied as a
credit against the then unpaid principal amount hereof or be refunded to Maker,
at Payee's option, and (c) upon such final maturity the effective rate of
interest shall be automatically reduced to the maximum lawful rate allowed under
applicable usury laws as now or hereafter construed by the courts having
jurisdiction thereof. Without limiting the foregoing, all calculations of the
rate of interest contracted for, charged, taken, reserved or received under this
Amended Replacement Note or under such other documents which are made for the
purpose of determining whether such rate exceeds the maximum lawful rate, shall
be made, to the extent permitted by law, by amortizing, prorating, allocating
and spreading in equal parts during the period of the full stated term of the
loan evidenced hereby, all interest at any time contracted for, charged, taken,
reserved or received from Maker or otherwise by Payee in connection with such
indebtedness. The terms of this paragraph shall be deemed to be incorporated in
every loan document, security instrument, and communication relating to this
Amended Replacement Note and loan.
In the event that the laws of the State of Texas are determined by a court
of competent jurisdiction to be applicable to this Amended Replacement Note,
notwithstanding the expressed intention of the parties to be governed by the
laws of the State of New York, then the provisions of Texas Financing Code,
Chapter 346 (formerly Tex. Rev. Civ. Stats., Title 79, Chapter 15) are
specifically declared by the parties hereto not to be applicable to this Amended
Replacement Note, the applicable interest rate ceiling is the weekly ceiling
(formerly the indicated rate ceiling) determined in accordance with Tex. Rev.
Civ. Stat., Title 79, Article 5069-1D.003 also codified at Texas Finance Code
Section 303.301 (formerly Article 5069-1.04(a)(1)), as amended, and, to the
extent that this Amended Replacement Note is deemed an open end account as such
term is defined in Tex. Rev. Civ. Stat., Title 79, Article 5069-1B.002(14) also
codified at Texas Finance Code, Section 301.001(3) (formerly Article 5069-
1.01(f)), as amended, the Payee retains the right to modify the interest rate in
accordance with applicable law.
Maker warrants that this Amended Replacement Note is executed solely for
business or commercial purposes, other than agricultural purposes and warrants
that it is specifically exempted under Section 226.3(a) of Regulation Z issued
by the Board of Governors of the Federal Reserve System and under Title I
(Truth-in-Lending Act) and Title V (General Provision) of the Consumer Credit
Protection Act, and that no disclosures are required to be given under such
regulations and federal laws in connection with the above transaction.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
AMERICAN RESOURCES OFFSHORE, INC.
By: /s/ X.X. Xxxxxx
-----------------
Name: X.X. Xxxxxx
Title: Vice President
