FIRST AMENDMENT
TO
SECURITY INTEREST AGREEMENT
Security interest in Securities
DATED this 18th day of March 1998
BETWEEN:
(1) LONDON AUSTRALIAN & GENERAL PROPERTY COMPANY LIMITED, a company
incorporated in England whose registered office is a 0 Xxxxxxxxx
Xxxxx, Xxxxxx XX0X 0XX, Xxxxxxx ("Lender"), as assignee of
THAMESEDGE LIMITED, a company incorporated in England whose
registered office is a 0 Xxxxxxxxx Xxxxx, Xxxxxx XX0X 0XX, Xxxxxxx
("Original Lender")
AND
(2) HONDO OIL & GAS COMPANY, a Delaware corporation whose principal
office is at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
XXX (the "Debtor")
AND
(3) FOLIO TRUST COMPANY LIMITED, a company incorporated in Jersey whose
registered office is at Westaway Xxxxxxxx, 00 Xxx Xxxxxx, Xx.
Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxx ("Folio Trust")
AND
(4) FOLIO NOMINEES LIMITED, a company incorporated in the British
Virgin Islands whose administrative office is at Westaway Xxxxxxxx,
00 Xxx Xxxxxx, Xx. Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxx ("Folio
Nominees")
WHEREAS
(A) The Debtor has entered into a certain Security Interest
Agreement, dated May 13, 1997 (the "Original Security Interest
Agreement"), in favor of the Original Lender, in which the Debtor (among
other things) granted a lien and security interest in certain Collateral
to the Original Lender;
(B) London Australian & General Property Company Limited has
received an assignment from Thamesedge Limited ("Thamesedge") of all of
the Obligations and all of Thamesedge's rights and duties under the
Original Security Interest Agreement;
(C) The Lender has agreed to extend additional credit to the
Debtor and to extend the maturity dates of the Obligations;
(D) As a condition thereto, the Lender has requested, and the
Debtor has agreed, to enter into this Amendment;
(E) Capitalized terms used and not otherwise defined or amended in
this Amendment shall have the meanings respectively assigned to them in
(or determined in accordance with) the Original Security Interest
Agreement.
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In consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, IT IS HEREBY AGREED AS FOLLOWS:
1. Amendment to Original Security Interest Agreement. The
Original Security Interest Agreement is hereby amended as of the date
first written above as follows:
(A) All references in the Original Security Interest
Agreement or in this Amendment to "this Agreement" or "this Security
Interest Agreement", or similar references, shall mean the Original
Security Interest Agreement, as amended by this Amendment, and as the
same may be further amended, restated or otherwise modified or
supplemented from time to time in accordance with the terms thereof.
This Amendment may be referred to in this Agreement as the "First
Security Interest Agreement Amendment".
(B) In Section 1 of the Original Security Interest Agreement,
clauses (i), (ii) and (iii) are amended to read:
"(i) all monies and liabilities payable under the credit
and loan facilities (as same has been and may be
supplemented, modified, amended or restated from
time to time) described in the First Schedule;
(ii) any other indebtedness or liabilities whatsoever of
the Debtor now existing or hereafter incurred on any
account or accounts in favor of the Lender; and
(iii) all other costs, charges, legal or other
expenses (incurred by the Lender in respect of the
facilities detailed in the First Schedule) on a full
and unqualified indemnity basis;
(collectively the "Obligations"):"
(C) In Section 8, the following new paragraph is added at
the end thereof without the deletion or modification of any other
material:
"With respect to any Collateral and subject to any contrary
requirement of applicable law, (x) the Lender shall collect
the cash proceeds received from any sale or other liquidation
or disposition or from any other source and (y) after
deducting all costs and expenses incurred by the Lender and
any person designated by the Lender to take any of the actions
in connection with such collection and sale or other
liquidation or disposition (including attorneys'
disbursements, expenses and fees), the Lender in its sole and
absolute discretion may retain the same as additional or
substitute Collateral or may apply the same (first to interest
then to principal) to the Obligations described in and in
direct order set forth on the First Schedule. In the event
any funds remain after satisfaction in full of all of the
Obligations, then the remainder shall be returned to the
Debtor, subject, however, to any other rights or interests the
Lender may have therein under any other instrument, agreement
or document or applicable law. If the amount of all proceeds
received with respect to and in liquidation of the Collateral
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that shall be applied to payment of the Obligations shall be
insufficient to pay and satisfy all of the Obligations in
full, the Debtor acknowledges and agrees that the Debtor shall
remain and be jointly and severally liable for any deficiency.
(D) The First Schedule is amended to read as follows:
FIRST SCHEDULE
The Obligations
1. Amended and Restated Note dated as of 18th December, 1997
in the principal amount of US$7,500,000 (seven million
five hundred thousand United States dollars) which
amends, restates and replaces that certain Note dated
31st October, 1994, in the principal amount of
US$5,000,000.00 (five million United States dollars), as
assigned to Thamesedge and, in turn, to London Australian
& General Property Company ("LAGP"), as same may be
supplemented, modified, amended or restated from time to
time (the "Facility Note");
2. Amended and Restated Revolving Credit Agreement dated 2nd
July, 1997 between Debtor and Lender, as same has been,
and as same may be, supplemented, modified, amended or
restated from time to time, including any Promissory Note
or Notes issued thereunder, as same has been, and as same
may be, supplemented, modified, amended or restated from
time to time (the "Revolving Credit Note");
3. Amended and Restated Note dated as of 18th December, 1997
in the principal amount of US$4,500,000 (four million
five hundred thousand United States dollars) which
amends, restates and replaces that certain Note dated
30th April, 1993, in the principal amount of
US$3,000,000.00 (three million United States dollars)
from Via Verde Development Company ("Via Verde") to
Lonrho, as assigned to Thamesedge and, in turn, to LAGP,
as same may be supplemented, modified, amended or
restated from time to time, including to add unpaid
interest to principal (the "Via Verde Note"), secured by
a deed of trust recorded as Instrument No. 93-840817 in
the Real Property Records of Los Angeles County,
California as same has been, and as same may be,
supplemented, modified, amended or restated from time to
time (the "Via Verde Mortgage"), and guaranteed by Debtor
in a Guaranty dated 30th April, 1993 as same has been,
and as same may be, supplemented, modified, amended or
restated from time to time (the "Hondo Guaranty");
4. Amended and Restated Note dated as of 18th December, 1997
in the principal amount of US$5,500,000 (five million
five hundred thousand United States dollars) which
amends, restates and replaces that certain Note dated
25th June, 1993, in the principal amount of
US$4,000,000.00 (four million United States dollars) from
Hondo to Lonrho, as assigned to Thamesedge and, in turn,
to LAGP, as same may be supplemented, modified, amended
or restated from time to time, including to add unpaid
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interest to principal (the "Valley Gateway Note"),
secured by a deed of trust dated 30th August, 1993,
granted by Borrower and Newhall Refining Co., Inc.
("Newhall") recorded as Instrument No. 00-0000000 in the
Real Property Records of Los Angeles, California, as same
has been, and as same may be, supplemented, modified,
amended or restated from time to time (the "Valley
Gateway Mortgage");
5. Consolidated, Amended and Restated Note dated 18th
December, 1997 in the principal amount of US$40,000,000
(forty million United States dollars) which consolidates,
amends, restates and replaces that certain Notes dated
1st September, 1991, in the original principal amount of
US$10,000,000.00 (ten million United States dollars);
dated 1st November, 1991 in the original principal amount
of US$9,000,000.00 (nine million United States dollars);
and dated 20th December, 1991, in the original principal
amount of US$13,000,000.00 (thirteen million United
States dollars) from Debtor to Lonrho Plc ("Lonrho"), as
assigned to Thamesedge and, in turn, to LAGP, as each has
been, and as each may be, supplemented, modified,
amended, consolidated and/or restated from time to time,
including to add unpaid interest to principal (the
"Lonrho Notes");
6. Note Purchase Agreement dated 28th November, 1988,
between Debtor (formerly known as Xxxxxx Petroleum Inc.)
and Thamesedge Limited ("Thamesedge"), as same has been,
and as same may be, supplemented, modified amended or
restated from time to time (the "Thamesedge Note Purchase
Agreement") and an Amended and Restated Note dated as of
18th December, 1997 in the principal amount of
US$75,000,000 (seventy-five million United States
dollars) which amends, restates and replaces that certain
Note dated 30th November, 1988, for US$75,000,000.00
(seventy-five million United States dollars) from Debtor
to Thamesedge, as same may be supplemented, modified,
amended or restated from time to time, including to add
unpaid interest to principal (the "Thamesedge Note");
The Thamesedge Note, the Lonrho Notes, the Via Verde
Notes, the Valley Gateway Note, the Facility Note and the
Revolving Credit Note, are collectively referred to as
the "Indebtedness";
By assignment dated 29th March, 1996, between Lonrho and
Thamesedge, Lonrho assigned all of its interests in any
Indebtedness owed to it to Thamesedge; and
By assignment dated 29th August, 1997, between Thamesedge
and LAGP, Thamesedge assigned all of its interest in any
Indebtedness owed to it to LAGP.
2. Acknowledgment. The Debtor hereby acknowledges and certifies
and agrees that: (a) the pledge and security interest granted by the
Debtor to the Lender under this Agreement as Collateral for the
Obligations (i) remains and shall continue in full force and effect,
both before and after giving effect to this Amendment, (ii) is not
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subject to any defence, counterclaim, set off, right of recoupment,
abatement, reduction or other claim or determination, and (iii) is and
shall continue to be governed by the terms and provisions of the
Original Security Interest Agreement, as amended by this Amendment and
as the same may be further amended or otherwise modified from time to
time in accordance with the terms thereof.
3. Representations and Warranties. To induce the Lender to enter
into this Amendment and consummate the transactions contemplated hereby,
the Debtor hereby represents and warrants to the Lender that as of the
date of this Amendment the representations and warranties set forth in
the Agreement 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.
4. Counterparts. This Amendment may be signed in two or more
counterpart copies, 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.
5. Governing Law, Etc. This Amendment shall be governed by and
construed in accordance with the applicable terms and provisions of the
Original Security Interest Agreement (as amended hereby), which terms
and provisions are incorporated herein by reference.
[END OF PAGE]
6. Agreement to Continue as Amended. The Original Security
Interest Agreement, as amended by this Amendment, shall remain and
continue in full force and effect from and after the date hereof.
IN WITNESS whereof the parties hereto have hereunto set their hands and
seals the day and year first above written.
The Common Seal of
LONDON AUSTRALIAN & GENERAL PROPERTY
COMPANY LIMITED
was hereunto affixed
in the presence of:
/s/ R.E. Xxxxxxx Director
-------------------------------
/s/ N. J. Xxxxxxx Director
-------------------------------
Signed by
duly authorized
for and on behalf of:
HONDO OIL & GAS
COMPANY
/s/ Xxxx X. Xxxx President
-------------------------------
The Common Seal of
FOLIO TRUST COMPANY
LIMITED
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was hereunto affixed
in the presence of:
/s/ R. Xxxxx Xxxxxxx Director
-------------------------------
/s/ Xxxxxxxx St. Xxxxx Xxxxxx Director
-------------------------------
The Common Seal of
FOLIO NOMINEES LIMITED
was hereunto affixed
in the presence of:
/s/ R. Xxxxx Xxxxxxx Director
-------------------------------
/s/ Xxxxxxxx St. Xxxxx Xxxxxx Director
-------------------------------
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