CREDIT AGREEMENT
between
UNION PLANTERS BANK, N.A.
and
FIELDPOINT PETROLEUM CORPORATION
---------------------
$2,000,000.00
Revolving Credit Note
---------------------
---------------------
December 14, 2000
---------------------
TABLE OF CONTENTS
ARTICLE 1. DEFINED TERMS.................................................... 1
Section 1.1 Certain Defined Terms..................................... 1
Section 1.2 Other Definitional Provisions............................. 5
ARTICLE 2. AMOUNT AND TERMS OF THE LOAN..................................... 5
Section 2.1 Borrowing Base and the Loan............................... 5
Section 2.2 Interest and Fees......................................... 6
Section 2.3 Payments.................................................. 6
Section 2.4 Prepayment................................................ 6
Section 2.5 Payment on Non-Business Days.............................. 7
Section 2.6 Overdue Principal and Interest............................ 7
Section 2.7 Usury Not Intended........................................ 7
ARTICLE 3. CONDITIONS PRECEDENT............................................. 8
Section 3.1 Conditions Precedent to the Initial Advance............... 8
Section 3.2 Conditions Precedent to Each Subsequent Advance........... 8
ARTICLE 4. REPRESENTATIONS AND WARRANTIES................................... 9
Section 4.1 Corporate Authority....................................... 9
Section 4.2 Authorization; Consent.................................... 10
Section 4.3 Binding Obligations....................................... 10
Section 4.4 Financial Condition....................................... 10
Section 4.5 Title, Etc................................................ 10
Section 4.6 Investments and Guaranties................................ 10
Section 4.7 Liabilities; Litigation................................... 11
Section 4.8 Taxes; Governmental Charges............................... 11
Section 4.9 Licenses and Permits...................................... 11
Section 4.10 Defaults.................................................. 11
Section 4.11 ERISA..................................................... 11
Section 4.12 Environmental............................................. 11
Section 4.13 Margin Stock.............................................. 12
Section 4.14 No Material Misstatements................................. 12
ARTICLE 5. AFFIRMATIVE COVENANTS............................................ 13
Section 5.1 Business and Financial Information........................ 13
Section 5.2 Certificates of Compliance................................ 15
Section 5.3 Books and Records......................................... 15
Section 5.4 Inspection................................................ 15
Section 5.5 Maintenance of the Property............................... 15
Section 5.6 Compliance with Laws, etc................................. 15
Section 5.7 Taxes and Other Liens..................................... 15
Section 5.8 Performance of Obligations................................ 16
Section 5.9 Maintenance............................................... 16
Section 5.10 Further Assurances........................................ 16
Section 5.11 Required Insurance........................................ 16
Section 5.12 Conduct of Business....................................... 16
i
Section 5.13 Title Opinion............................................. 16
Section 5.14 Information............................................... 17
Section 5.15 Access to Mortgaged Properties............................ 17
Section 5.16 Maintenance of Borrower's Files........................... 17
Section 5.17 Reservoir Reports......................................... 18
Section 5.18 Title Opinions. ......................................... 18
Section 5.19 Notice of Change of Address; Transfer or Division
Orders; Change of Purchaser.................................... 18
ARTICLE 6. NEGATIVE COVENANTS............................................... 18
Section 6.1 Debt...................................................... 18
Section 6.2 Liens..................................................... 18
Section 6.3 Dividends; Redemptions.................................... 19
Section 6.4 Sale of Assets; Mortgaged Properties...................... 19
Section 6.5 Limitations on Contingent Liabilities..................... 19
Section 6.6 Investments, Loans and Advances........................... 20
Section 6.7 Mergers; etc.............................................. 20
Section 6.8 Nature of Business........................................ 20
Section 6.9 ERISA..................................................... 21
Section 6.10 Sale or Discount of Receivables........................... 21
Section 6.11 Sale and Leasebacks....................................... 21
Section 6.12 Transaction with Affiliates............................... 21
Section 6.13 Environmental Matters..................................... 21
Section 6.14 Cancellation of Insurance................................. 21
Section 6.15 No Subsidiaries........................................... 21
Section 6.16 Independence of Covenants................................. 21
ARTICLE 7. DEFAULT.......................................................... 22
Section 7.1 Events of Default......................................... 22
Section 7.2 Rights and Remedies....................................... 23
ARTICLE 8. MISCELLANEOUS.................................................... 24
Section 8.1 Expenses.................................................. 24
Section 8.2 Indemnification........................................... 24
Section 8.3 Waivers................................................... 25
Section 8.4 Applicable Law............................................ 25
Section 8.5 Notices................................................... 25
Section 8.6 Survival of Warranties and Agreements..................... 25
Section 8.7 Waiver; Remedies Cumulative............................... 25
Section 8.8 Severability.............................................. 26
Section 8.9 Entire Agreement.......................................... 26
Section 8.10 Further Assurances........................................ 26
Section 8.11 Headings.................................................. 26
Section 8.12 Successors and Assigns; Subsequent Holders of the
Revolving Credit Note.......................................... 26
Section 8.13 Amendments................................................ 27
Section 8.14 Counterparts; Effectiveness............................... 27
Section 8.15 Joinder................................................... 27
ii
ANNEXES AND SCHEDULES
---------------------
ANNEX A - Essential Loan Terms
ANNEX B - Form of Revolving Credit Note
ANNEX C - Schedule of Mortgages
ANNEX D - Form of Guaranty Agreement
ANNEX E - Form of Advance Certificate
ANNEX F - Form of Security Agreement covering Bank Accounts
Schedule 4.7 - Existing Litigation
Schedule 4.8 - Outstanding Taxes
Schedule 6.1 - Existing Debt
Schedule 6.2 - Existing Liens
iii
CREDIT AGREEMENT
$2,000,000 REVOLVING LINE OF CREDIT
--------------------------------------------------------------------------------
THIS CREDIT AGREEMENT dated as of this 14th day of December, 2000 , is
by and between each of the following named parties whose respective addresses,
telephone and telecopier numbers are set forth with their names:
UNION PLANTERS BANK (the "Bank")
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: 713/000-0000
Telecopier: 713/867-7439
Attention: Xxxxxxx Xxxxxx, Senior Vice President
and
FIELDPOINT PETROLEUM CORPORATION (whether one or more, "Borrower")
a Colorado corporation
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000
Telephone: 512/000-0000
Telecopier: 512/335-1294
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain a loan, the proceeds of which will
be used for the purposes set forth on Annex A and which loan shall be secured by
those certain oil and gas properties which are more particularly described on
Annex C; and
WHEREAS, the Bank is willing to make the loan to Borrower on the terms
and conditions provided herein;
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and undertakings herein contained, the Bank and Borrower hereby agree
as follows:
ARTICLE 1. DEFINED TERMS
Section 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under, controlled with,
such Person. For the purposes of this definition, "control" (including with
correlated meanings, the terms "controlling," "controlled by" and "under control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means this Credit Agreement, as amended or supplemented
from time to time in accordance with the terms hereof. This Agreement shall be
deemed to include each of the Security Documents; accordingly, this Agreement
and the Security Documents should be read and treated as one agreement.
-1-
"Borrowing Base" means the aggregate outstanding indebtedness in an
amount determined by the Bank in its sole discretion, in accordance with its
normal and customary oil and gas lending parameters and Procedures. The "Initial
Borrowing Base" is set forth on Annex A. The Borrowing Base may be redetermined
from time to time, as provided in this Agreement.
"Borrowing Base Redetermination Date" means the (i) date set forth on
Annex A, (ii) the date that is thirty (30) days after the date that Borrower
delivers to the Bank a request for a redetermination of the Borrowing Base,
together with such engineering, title, and other information as the Bank may
require in connection with such redetermination, and (iii) any other date on
which the Bank, in its sole discretion, redetermines the Borrowing Base;
provided, however, that the Bank will not exercise its rights under this clause
(iii) more often than once during any calendar year).
"Borrower's Files" means all now owned or hereafter acquired, books,
records, files, land files, well logs, engineering data, reports, analyses,
title opinions, and any other information pertinent to the ownership, operation
or evaluation of the Mortgaged Properties.
"Business Day" means any day other than a Saturday, Sunday or legal
holiday under the laws of the State of Texas.
"Corporate Guarantor" means Bass Petroleum, Inc. If there is no
corporate guarantor of the indebtedness of Borrower, then all references herein
to Corporate Guarantor shall be deemed inapplicable, and this Agreement shall be
deemed amended to the extent necessary to delete any reference to Corporate
Guarantors.
"Debt" shall mean, as applied to any Person, without duplication; (a)
all indebtedness of such Person for borrowed money (whether matured or
unmatured, liquidated or unliquidated, direct or indirect, joint or several,
contingent or otherwise); (b) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(c) any obligation owed for the deferred purchase price of assets or services
and all obligations under leases which shall have been, or should have been, in
accordance with generally accepted accounting principles, recorded as capital
leases in respect of which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss; (d) all indebtedness secured by any
Lien on any Property owned or held by such Person, whether or not the
indebtedness secured thereby shall have been assumed; (e) all direct and
indirect liability, contingent or otherwise, of that Person with respect to any
letter of credit (other than letters of credit secured by cash), guaranty or in
respect of which such Person otherwise assures a creditor against loss; and (f)
any other indebtedness or obligation which, in accordance with generally
accepted accounting principles, would be shown on the liability side of a
balance sheet.
"Default" means the occurrence of any of the events described in
Section 7.1 hereof.
"Environmental Laws" shall mean the Resource Conservation and Recovery
Act of 1987, as amended, the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended, the Oil Pollution Act of 1990, as
amended, any so-called "Superfund" or "Superlien" law, the Toxic Substances
Control Act, the Clean Air Act and any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste or substance, whether now in existence or at any time hereafter
in effect.
"Event of Default" means any of the events specified in Section 7.1.
-2-
"Governmental Requirement" shall mean any applicable law, statute,
code, ordinance, order, rule, policy, regulation, judgment, decree, directive,
injunction, franchise, permit, certificate, license, authorization or other
direction or requirement of any domestic or foreign Federal, state, county,
parish, municipal or other government, department, commission, board, court,
agency or any other instrumentality of any of them, which exercises jurisdiction
over Borrower or any of its property.
"Guarantors" means the Corporate Guarantor (if any) and Xxx X. Xxxxxx,
Xx., whose address is set forth on Annex A.
"Guaranty Agreement" means the Guaranty Agreement in the form of Annex
D, in favor of the Bank to be executed by each of the Guarantors.
"Hazardous Materials" shall mean any hazardous substance, pollutant or
contaminant defined as such in (or for the purposes of) any Environmental Law
and shall include, but not be limited to, petroleum (except to the extent that
petroleum is deemed exempt for the purpose of any Environmental Law), any
radioactive material and asbestos in any form or condition.
"Hydrocarbons" means all present and future oil, gas, casinghead gas,
drip gasoline, natural gasoline, distillate, all other liquid or gaseous
hydrocarbons produced or to be produced in conjunction therewith, all products,
by-products, and all other substances derived therefrom or the processing
thereof, and all other similar minerals now or hereafter accruing to,
attributable to, or produced from the Mortgaged Property.
"Laws" means all applicable statutes, laws, ordinances, regulations,
orders, units, writs, injunctions, or decrees of any state, commonwealth,
nation, territory, possession, county, parish, municipality, or Tribunal.
"Lien" means, as applied to property or assets, real or personal,
tangible or intangible, any claim, pledge, hypothecation, mortgage, lien,
charge, restriction, deposit arrangement, security interest, security
arrangement, financing lease, deed of trust or encumbrance of any kind
(including, without limitation, any conditional sale agreement or any other
title retention agreement) or any sale or similar arrangement of any Person
whether arising by contract or under law. The term "Lien" shall also include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting property.
"Material Adverse Effect" means any set of circumstances or events
which (i) will or could reasonably be expected to have any adverse effect
whatsoever upon the validity, performance, or enforceability of this instrument
or the other Security Documents, (ii) is or could reasonably be expected to be
material and adverse to the financial condition of Borrower as represented to
the Bank in the financial statements heretofore furnished to the Bank by
Borrower, (iii) will or could reasonably be expected to impair Borrower's
ability to fulfill its obligations under the terms and conditions of the Note,
this instrument, or the other Security Documents, or (iv) will or could
reasonably be expected to cause a Default (as defined herein).
"Maturity Date" means, unless extended by the Bank in its sole
discretion, the earlier of the Maturity Date indicated in Annexes A and B, or
the acceleration by the Bank of amounts due under the Note.
"Monthly Borrowing Base Reduction" means an amount by which the
Borrowing Base shall reduced on a monthly basis, as set forth in Section 2.1,
below.
-3-
"Mortgage" means each of the Deeds of Trust, Mortgages, Assignments of
Production, Security Agreements and Financing Statements referred to on Annex C
which have heretofore been executed for the benefit of Bank by Borrower or the
Corporate Guarantor.
"Mortgaged Property" has the meaning specified in the Mortgages.
"Person" means and includes natural persons, corporations, partnerships
or other organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof.
"Plan" shall mean any employee pension, retirement, profit-sharing,
benefit or other similar employee benefit plan, any part or all of which is
subject to or governed by any provision of the Employee Retirement Income
Security Act of 1974, as amended.
"Prime Rate" means at any time the prime rate of interest, as quoted in
the Wall Street Journal, with the understanding that such prime rate may not be
the lowest of the rates of interest available from the Bank, and which rate of
interest shall change as and when announced in the Wall Street Journal, without
notice to Borrower or any other Person.
"Security Agreement" means the Security Agreement substantially in the
form of the attached Annex F which is being executed by Borrower in favor of the
Bank and covers Borrower's accounts established at the Bank, to which reference
is here made for all purposes.
"Security Documents" means the Security Agreements, the Guaranty
Agreements, the Mortgages, and any related notices, powers of attorney, proxies
and other financing statements and any other documents now or hereafter existing
securing all amounts due and owing hereunder, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
"Taxes" means taxes, assessments, fees, levies, imposts, duties,
deductions, withholdings, or other similar charges from time to time or at any
time imposed by any Law or any Tribunal, including, but not limited to, ad
valorem taxes, windfall profits taxes, franchise taxes, severance taxes,
production taxes, and excise taxes.
"Loan" means the aggregate outstanding principal amount, at any time,
of the Loan Advances.
"Loan Advances" means the advances by the Bank to Borrower pursuant to
Section 2.1.
"Note" means the promissory note executed and delivered to the Bank by
Borrower with respect to the Loan, substantially in the form of Annex B, as the
same may be modified, amended, endorsed or otherwise rearranged from time to
time in accordance with the terms hereof.
"Tribunal" means any court or governmental department, commission,
board, bureau, agency, or instrumentality of any state, commonwealth, nation,
territory, possession, county, parish, or municipality whether now or hereafter
constituted or existing.
"Trustee" means the person identified in the Mortgage as the "Trustee".
Section 1.2 Other Definitional Provisions. References to "Sections"
shall be to Sections of this Agreement unless otherwise specifically provided.
Any of the terms defined in Section 1.1 may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
-4-
ARTICLE 2. AMOUNT AND TERMS OF THE LOAN
Section 2.1 Borrowing Base and the Loan. The Bank, on the terms and
conditions hereinafter set forth, agrees to make a Loan to Borrower in an amount
up to but no greater than the Borrowing Base. The aggregate outstanding
indebtedness, including all presently existing loans of Borrower, shall never
exceed the Borrowing Base, as the same may be redetermined from time to time, as
provided in this Agreement. The Initial Borrowing Base is set forth on Annex A.
The amount of the Borrowing Base will be redetemined by the Bank as of each
Borrowing Base Redetermination Date, taking into account such matters as the
Bank, in its sole discretion, deems relevant. The Borrowing Base shall be
increased or decreased, as the case may be, immediately upon each Borrowing Base
Redetermination Date. Effective as of the date of the Initial Borrowing Base
Reduction, as set forth on Annex A, the Borrowing Base shall be reduced by the
Monthly Borrowing Base Reduction which is set forth on Annex A, and each month
subsequent to such date, the Borrowing Based shall be deemed reduced by a like
amount. Upon any change in the Borrowing Base, the Bank shall redetermine, in
its sole discretion, the amount by which the Borrowing Base will reduce
effective the first day of each month thereafter. If the requisite engineering
report for the Borrowing Base Redetermination is not submitted in a timely
manner, as required in this Agreement, the line of credit offered herein shall
be frozen.
The schedule for all Loan advances is set forth on Annex A. The Loan
Advances shall be evidenced by the Note, a copy of which is attached as Annex B.
A duly authorized officer of Borrower shall request each Loan Advance by
delivering to the Bank a certificate in the form of Annex D.
Section 2.2 Interest and Fees.
(a) Borrower shall pay to the Bank, at the Closing of the Loan, the
Original Transaction Fee set forth on Annex A. Borrower shall pay to the Bank
the sum prescribed on Annex A as an Additional Facility Fee upon the effective
date of any increase in the Borrowing Base. Finally, Borrower shall pay to the
Bank a Borrowing Base Redetermination Fee in the amount set forth on Annex A, or
such lesser amount as the Bank may determine, in its sole discretion, for each
redetermination of the Borrowing Base which is based upon a third party
engineering report satisfactory to the Bank and which has been delivered to the
Bank; in addition, Borrower shall reimburse the Bank for all engineering and
related expenses incurred by the Bank in connection with such redetermination,
including a reasonable charge for services performed by employees of the Bank or
its affiliates.
(b) Interest shall accrue on the outstanding daily principal balance of
the Loan at the rate and in the manner provided on Annexes A and B. Borrower
acknowledges and agrees that the rate of interest on the Loan may change at any
time, and from time to time, on the effective date of each change in the Prime
Rate. Borrower agrees that the amount shown on the books and records of the Bank
as being the aggregate principal amount of the Loan and any accrued and unpaid
interest, fees or expenses shall be prima facie evidence of the amounts
outstanding under the Note and this Agreement. The Bank agrees to provide
Borrower with monthly statements setting forth the current principal balance of
the Loan and the accrued and unpaid interest, fees and expenses due from
Borrower.
(c) All interest due pursuant to this Agreement or the Note shall be
computed on the basis of a 365 day year and paid for the actual number of days
elapsed (including the first but excluding the last day) during any period.
-5-
Section 2.3 Payments.
(a) All payments of principal and accrued and unpaid interest on the
Loan shall be made on the schedule set forth on Annex A. Borrower may reduce the
principal amount of the Loan from time to time, in accordance with Section 2.4,
below, and thereafter increase the amount of the Loan by reborrowing the amount
of any prepayement(s), subject to the limitations imposed by the Borrowing Base,
as provided in this Agreement. All payments of principal and interest due under
the Note and all fees and expenses provided for hereunder shall be made to the
Bank without setoff, counterclaim or deduction in immediately available funds to
an account designated by the Bank to Borrower from time to time.
(b) Any payment made under this Agreement, the Note or the Security
Documents shall be applied in the following order: first, to any fees or
expenses payable under this Agreement, the Note and the Security Documents;
second, to any accrued and unpaid interest under the Note; and third, to any
principal outstanding under the Note.
Section 2.4 Prepayment. Borrower may, on at least three (3) Business
Days' notice to the Bank specifying the date and amount of any such prepayment,
prepay the Loan in whole or in part at any time or from time to time without
penalty or premium but with accrued interest to the date of prepayment on the
amount so prepaid; provided, however, that no such prepayment shall be in an
amount less than the minimum prepayment amount set forth on Annex B, unless the
Bank shall otherwise agree. Borrower shall have the right to re-borrow any
amounts prepaid hereunder, as provided in Section 2.3(a), above.
Section 2.5 Payment on Non-Business Days. Whenever any payment to be
made hereunder or under the Note shall be stated to be due on a day other than a
Business Day, such payment may 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 on the Note.
Section 2.6 Overdue Principal and Interest. Any principal of, and, to
the extent permitted by law, interest on, the Note overdue for more than three
Business Days shall bear interest, payable on demand, for each day until paid at
a rate equal to 3% per annum above the rate specified in Section 2.3, but in no
event to exceed the maximum non-usurious rate permitted by applicable law.
Section 2.7 Usury Not Intended. It is the intent of Borrower and the
Bank in the execution and performance of this Agreement to contract in strict
compliance with applicable usury laws governing the Note, including any
applicable law from time to time in effect. In furtherance thereof, the Bank and
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or any Security Document delivered pursuant to this Agreement
shall ever be construed to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a rate in excess of the
maximum nonusurious rate of interest permitted by applicable law and that for
purposes hereof, interest shall include the aggregate of all charges which
constitute interest under such laws that are contracted for, charged or received
under this Agreement; and in the event that, notwithstanding the foregoing,
under any circumstances the aggregate amounts taken, reserved, charged, received
or paid on the Note include amounts which by applicable law are deemed interest
which would exceed the maximum amount of nonusurious interest permitted by
applicable law, then such excess shall be deemed to be a mistake, and the Bank
shall credit the same against the principal outstanding under the Note. In the
event that the maturity of the Note has been accelerated under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the maximum
nonusurious amount permitted by applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be cancelled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited against the amounts due under the Note or, if the Note shall have
been paid in
-6-
full, refunded to Borrower. It is further agreed that, without limiting the
foregoing, all calculations of the rate of interest contracted for, charged or
received by the Bank under the Note, this Agreement or the other Security
Documents shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of the indebtedness evidenced by the Note all interest
at any time contracted for, charged or received by the the Bank in connection
therewith. The provisions of this Section 2.7 shall control over all other
provisions of this Agreement, the Note and any other instrument executed and
delivered pursuant to this Agreement which may be in apparent conflict herewith.
ARTICLE 3. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the Initial Loan Advance. The
obligation of the Bank to make the initial Loan Advance is subject to the
conditions precedent that the Bank shall have received on or before the date
thereof all the following in form and substance satisfactory to the Bank:
(a) this Agreement, the Note, the Security Agreement and each of the
Security Documents properly executed on behalf of Borrower and the other Persons
specified therein;
(b) Borrower shall have delivered such number of completed and undated
letters-in-lieu of transfer or division orders as the Bank shall have requested;
(c) certificates of insurance complying as to form and substance with
the terms of Section 11(i) of the Mortgage; and
(d) any other documents and instruments that the Bank shall have
requested concerning the accuracy and validity of or compliance with any
representation, warranty and covenant made by Borrower in this Agreement, the
satisfaction of any conditions contained herein and any other matters pertaining
hereto.
Section 3.2 Conditions Precedent to Each Loan Advance. The obligation
of the Bank to make each Loan Advance shall be subject to the following
additional conditions precedent:
(a) the representations and warranties contained in Section 4 shall be
true and correct in all material respects on and as of the date of such Loan
Advance as though made on and as of such date and no Event of Default or event
which, with the passage of time, the giving of notice, or both, would constitute
an Event of Default, shall have occurred and be continuing;
(b) The Bank shall have received satisfactory evidence that Borrower
owns good and defensible title to the Mortgaged Properties free and clear of all
Liens not permitted pursuant to the terms of this Agreement or the Mortgage;
(c) The Bank shall, on the date of such Loan Advance and the filing of
all appropriate Security Documents, have a first priority perfected deed of
trust Lien on and security interest in the Mortgaged Properties and any Liens
otherwise permitted under Section 6.2 of this Agreement and permitted by the
Mortgage; and
(d) Borrower shall have paid all fees and expenses due with respect to
such Loan Advance.
-7-
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the Loan, Borrower represents and warrants to the Bank as follows:
Section 4.1 Corporate Authority. Borrower (i) is a corporation duly
organized, validly existing, and in good standing under the Laws of its state of
incorporation, (ii) is duly qualified to transact business as a foreign
corporation in each jurisdiction where the nature and extent of its business and
properties require the same, (iii) possesses all requisite authority, power,
licenses, permits, and franchises to conduct its business and to execute,
deliver, and perform and comply with the terms of this Agreement, the Note and
those Security Documents to which it is a party, to enter into the Note, to
mortgage, grant, bargain, sell, pledge, assign, convey, transfer, and set over
the Mortgaged Property and to grant and create the Liens of this instrument and
the other Security Documents, and all of the foregoing having been duly
authorized and approved by all necessary corporate action on behalf of Borrower
and for which no approval or consent of any Person or Tribunal is required which
has not been obtained, (iv) has not used or transacted business under any other
corporate, assumed, or trade name in the five-year period preceding the date
hereof, (v) is not a "utility" as defined in Chapter 35 of the Texas Business
and Commerce Code, as amended, and (vi) is not (and the execution, delivery, and
performance of and compliance with the terms of this instrument or any other
Security Document will not cause Borrower to be) in violation of the Bylaws or
Articles or Certificate of Incorporation of Borrower. Borrower does not have any
subsidiaries, and does not own any other interest, direct or indirect, in any
other Person. The address of the chief executive office and principal place of
business of Borrower is as set forth in the opening paragraph of this Agreement.
Borrower has no other place of business. All records pertaining to its accounts
receivable (including computer records) are kept at this address. Borrower
agrees to maintain its principal office and place of business with all of
Borrower's Files, in the jurisdiction where Borrower is entitled to receive
notices hereunder unless changed after 30 days prior written notice to the Bank.
Section 4.2 Authorization; Consent. The execution, delivery and
performance of this Agreement, the Note and those Security Documents to which
Borrower is a party have been duly authorized by all necessary action by
Borrower and do not and will not (i) violate any provision of any Laws
applicable to Borrower, its certificate of incorporation, by-laws or any order,
judgment or decree of any court or other agency of government binding on
Borrower; (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contractual obligation of
Borrower, other than any such breach which will not, collectively or
individually, cause a Material Adverse Effect, and except those agreements for
which appropriate waivers or consents have been obtained and which are in full
force and effect and copies of which have been provided to the Bank; (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Borrower (other than in favor of the Bank); or (iv)
require any approval, authorization or declaration of, or to, any other Person
except for those Persons from whom appropriate consents or approvals have been
obtained and which are in full force and effect and copies of which have been
provided to the Bank.
Section 4.3 Binding Obligations. This Agreement, the Note and those
Security Documents to which Borrower is a party, when executed and delivered
will be, legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms.
Section 4.4 Financial Condition. The consolidated financial statements
of Borrower and the Corporate Guarantor previously delivered to the Bank fairly
present the consolidated financial position of each of these entities as of the
date thereof and have been prepared in accordance with generally accepted
accounting principles, and are correct and complete in all material respects.
There has been no material adverse change in the condition, financial or
otherwise, of either Borrower or the Corporate Guarantor since the date of the
most recent financial statements delivered to the Bank.
-8-
Section 4.5 Title, Etc. Borrower has good and defensible title in and
to all of its properties (i) shown as owned by Borrower on its books and records
and (ii) reflected in the financial statements previously delivered to the Bank
free and clear of all Liens except Liens otherwise permitted under Section 6.2
Section 4.6 Investments and Guaranties; Subsidiaries.
(a) Borrower has not made investments in, advances to or guaranties of
the obligations of any Person, except for investments, advances and guarantees
permitted by Section 6.6.
(b) Borrower has no subsidiaries except Bass Petroleum, Inc.
Section 4.7 Liabilities; Litigation.
(a) Borrower has no Debt, except as permitted by Section 6.1.
(b) There is no litigation, legal, administrative or arbitral
proceeding, investigation or other action of any nature pending or, to the
knowledge of Borrower, threatened against or affecting Borrower or threatened
against or affecting any property owned or leased by Borrower which will, if
determined adversely against Borrower, will have a Material Adverse Effect,
except as set forth on Schedule 4.7.
Section 4.8 Taxes; Governmental Charges. Borrower has filed all tax
returns (federal, state and local) and reports required to be filed and has paid
all Taxes, assessments, fees and other governmental charges levied upon it or
upon any of its properties or income which are due and payable except as set
forth in Schedule 4.8 and except such as are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
under generally accepted accounting principles have been established.
Section 4.9 Licenses and Permits. Borrower possesses all governmental
and regulatory licenses, permits, franchises and authorizations material to the
conduct of its business. All such leases, licenses, permits, franchises and
authorizations in any manner related to the property or business of Borrower and
all other instruments, documents and agreements pursuant to which Borrower has
obtained the right to use any property are in good standing, valid and effective
in accordance with their respective terms, and there is not under any of such
leases, instruments, documents or agreements any existing breach or default, nor
has there occurred any event that (with or without the giving of notice of lapse
of time, or both) would constitute a breach or default.
Section 4.10 Defaults. Borrower is not in default under, nor has any
event or circumstance occurred which, but for the passage of time or the giving
of notice, or both, would constitute a default under, any loan or credit
agreement, indenture, mortgage, deed of trust, security agreement or other
instrument or agreement evidencing or pertaining to any Debt of Borrower or
under any contract or instrument to which Borrower is a party or by which
Borrower is bound including, without limitation, any oil and/or gas lease,
operating agreement, unitization agreement or other similar agreement for the
production of Hydrocarbons.
Section 4.11 ERISA. Borrower does not sponsor, maintain or contribute
to any Plan, and has not at any time in the past sponsored, maintained or
contributed to any Plan.
-9-
Section 4.12 Environmental. (a) Except for matters which would not have
a material adverse effect on the Borrower or any Corporate Guarantor, the
Borrower, the Corporate Guarantor, and all of their respective properties,
assets and operations are in full compliance with all Environmental Laws.
Neither the Borrower nor any Corporate Guarantor is aware of, or has received
notice of, any past, present, or future conditions, events, activities,
practices, or incidents which may interfere with or prevent the compliance or
continued compliance in all materials respects by the Borrower and the Corporate
Guarantor with all Environmental Laws.
(b) The Borrower and the Corporate Guarantor have obtained all permits,
licenses, and authorizations which are required under all Environmental Laws
applicable to their respective businesses and properties.
(c) Except for matters which would not have a material adverse effect
on the Borrower or the Corporate Guarantor, no non-exempt Hazardous Materials
exist on, about, or within or have been used, generated, stored, transported,
disposed of on, or released from any of the properties or assets of the Borrower
or the Corporate Guarantor. The use which the Borrower and the Corporate
Guarantor make and intend to make of their respective properties and assets will
not result in the use, generation, storage, transportation, accumulation,
disposal, or release of any Hazardous Materials on, in, or from any such
properties or assets except for matters which would not have a material adverse
effect on the Borrower or such Corporate Guarantor.
(d) There is no action, suit, proceeding, investigation, or inquiry
before any court, administrative agency, or other governmental authority pending
or, to the knowledge of the Borrower, threatened against the Borrower or the
Corporate Guarantor relating in any way to any Environmental Law. Neither the
Borrower nor the Corporate Guarantor has (i) any material liability for remedial
action under any Environmental Law, (ii) received any request for information by
any governmental authority or other Person with respect to the condition, use,
or operation of any of its properties or assets that is reasonably likely to
result in any material liability for remedial action under any Environmental Law
or that is reasonably likely to have a material adverse effect on the Borrower
or such Corporate Guarantor or (iii) received any notice from any governmental
authority or other Person with respect to any material violation of or material
liability under any Environmental Law.
Section 4.13 Margin Stock. None of the proceeds of the Loan Advances
will be used for the purpose of purchasing or carrying "margin stock" as defined
in Regulation G of the Board of Governors of the Federal Reserve System (12
C.F.R. Part 207) or for the purpose of reducing or retiring any Debt which was
originally incurred to purchase or carry margin stock or for any other purpose
which might constitute this transaction a "purpose" credit within the meaning of
such Regulation G. Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stocks. Neither Borrower nor
any Person acting on its behalf has taken or will take any action which might
cause the Notes or this Agreement to violate Regulation G, or any other
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
Section 4.14 No Material Misstatements. No information, exhibit or
report including, without limitation, the reserve reports prepared by the
Borrower with respect to the Mortgaged Properties that has been furnished to the
Bank in connection with the negotiation of this Agreement contained any untrue
statement of any material fact or omits to state a material fact necessary in
order to make the statement contained herein or therein not misleading; subject,
however, in the case of the reserve reports provided by the Borrower to the
assumptions set forth therein. There is no fact known to the Borrower that the
Borrower foresees will have a material adverse effect on the operations,
Property, assets or condition (financial of otherwise) of the Borrower that has
not been disclosed herein or in such other documents, certificates and written
statements furnished to the Bank for use in connection
-10-
with the transactions contemplated hereby. Without limiting the foregoing, the
Borrower's interest in each of the Mortgaged Properties will (i) with respect to
each tract of land described in Exhibit A to the Mortgage (A) entitle the
Borrower to receive a decimal share of the Hydrocarbons produced from, or
obligated to, such tract not less than a decimal share of net revenue interests
set forth in Exhibit A to the Mortgage in connection with such tract, (B) cause
the Borrower to be obligated to bear a decimal share of the cost of exploration,
development and operation of such tract of land not greater than the decimal
share of working interests set forth in Exhibit A to the Mortgage in connection
with such tract and (ii) if such Mortgaged Properties are shown in Exhibit A to
be subject to a unit or units, with respect to each such unit, entitle the
Borrower to receive a decimal share of all Hydrocarbons covered by such unit
which are produced from, or allocated to, such unit not less than a decimal
share of unit working interests set forth in Exhibit A in connection with such
Mortgaged Properties.
ARTICLE 5. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any amounts are due
under the Note or this Agreement unless the Bank shall otherwise give its prior
written consent:
Section 5.1 Business and Financial Information. The Borrower will
promptly furnish to the Bank from time to time upon request such information
regarding the business and affairs and financial condition of the Borrower as
the Bank may reasonably request, and will furnish to the Bank:
(a) Annual Reports - promptly after becoming available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the audited consolidated balance sheet of the Borrower as of
the end of such year and the audited consolidated statements of income,
cash flow and stockholders' equity of the Borrower and the Corporate
Guarantor for such year, setting forth in each case in comparative
form, the corresponding figures for the preceding fiscal year, all in
reasonable detail, and certified by an independent firm of certified
public accountants reasonably acceptable to the Bank as having been
prepared in accordance with generally accepted accounting principles;
and
(b) Monthly Statements - promptly after becoming available,
and in any event within 30 days after the close of each calendar month
of the Borrower, the unaudited consolidated balance sheet of the
Borrower as of the end of such period, and unaudited consolidated
statements of income, cash flow and stockholders' equity for such month
and for the period from the beginning of the fiscal year to the close
of such month, accompanied by a statement of the chief financial
officer of the Borrower to the effect that such statements have been
prepared in accordance with generally accepted accounting principles;
and
(c) Production Information - promptly upon becoming available,
and in any event within 45 days after the end of each calendar month, a
report showing, for such calendar month, the gross proceeds
attributable to the interests of the Borrower of the sale of
Hydrocarbons produced from the Mortgaged Properties, the quantities so
sold, the taxes deducted from or paid out of such proceeds, the number
of xxxxx operated, drilled and abandoned, the aggregate lease operating
expenses payable with respect to the Mortgaged Properties for such
calendar month and such other information as the Bank may reasonably
request; and
(d) Notice of Default - promptly upon becoming aware of the
existence of any condition or event which constitutes, or with notice
or lapse of time (or both) would constitute, an Event of Default under
this Agreement, a written notice specifying the nature and period of
existence thereof and what action the Borrower is taking or proposes to
take with respect thereto; and
-11-
(e) Notice of Claimed Default - promptly upon becoming aware
that any Person has given notice or taken any other action with respect
to a claimed default under any indenture, mortgage, deed of trust,
promissory note, loan agreement or note agreement to which the Borrower
or the Guarantor is a party or has given written notice with respect to
a claimed default under any other material agreement or undertaking to
which the Borrower or the Guarantor is a party, a written notice
specifying the notice given or action taken by such Person and the
nature of the claimed default and what action the Borrower or such
Guarantor is taking or proposes to take with respect thereto; and
(f) Environmental Matters - give written notice to the Bank
immediately upon receipt of any notice that (i) the operations of
Borrower or the Guarantor are not in material compliance with the
requirements of all applicable Environmental Laws; (ii) Borrower or the
Guarantor is subject to federal or state investigation evaluating
whether any remedial action is needed to respond to the release of any
Hazardous Material into the environment that is reasonably likely to
result in any material liability for remedial action; or (iii) any
properties or assets of Borrower or the Guarantor are subject to an
Environmental Lien; and
(g) Litigation - promptly upon becoming aware of any action,
suit or proceeding pending or threatened against the Borrower or the
Guarantor in any court or before any arbitrator or governmental
authority which suit or proceeding is not being handled by an insurer
and is for any material amount, a written notice specifying the nature
thereof and what action the Borrower or such Guarantor is taking or
proposes to take with respect thereto.
Section 5.2 Certificates of Compliance. Concurrently with the
furnishing of the annual and the quarterly financial statements pursuant to
Sections 5.1(a) and (b) the Borrower will furnish or cause to be furnished to
the Bank a certificate signed by the President or chief accounting officer of
the Borrower stating that no Event of Default has occurred or is continuing.
Section 5.3 Books and Records. The Borrower shall, and shall cause the
Corporate Guarantor to, keep books of record and account in which full, true and
correct entries will be made of all financial dealings or transactions in
relation to its business and activities, in accordance with generally accepted
accounting principles, consistently applied.
Section 5.4 Inspection. The Borrower shall, and shall cause the
Corporate Guarantor to, permit any officer, employee or agent of the Bank to
visit and inspect any and all parts of its property, examine the books of record
and accounts of the Borrower and the Corporate Guarantor, take copies and
extracts therefrom, and discuss the affairs, finances and accounts of the
Borrower and the Corporate Guarantor with their respective officers, accountants
and auditors, all at such reasonable times and as often as the Bank may desire.
Section 5.5 Maintenance of the Property. The Borrower shall, and shall
cause the Corporate Guarantor to, maintain all property owned by it in
sufficient condition, or replace such property as is necessary in order to
continue the business of Borrower or such Guarantor in substantially the manner
in which it is presently conducted.
Section 5.6 Compliance with Laws, etc. The Borrower shall, and shall
cause the Corporate Guarantor to, comply in all material respects with all
Governmental Requirements (including, without limitation, Environmental Laws)
applicable to Borrower or such Guarantor or any property owned by any of them.
-12-
Section 5.7 Taxes and Other Liens. The Borrower shall pay and
discharge, and shall cause the Corporate Guarantor to pay and discharge,
promptly when due, all taxes, assessments and governmental charges or levies
imposed upon the Borrower or such Corporate Guarantor or upon the income or any
part of the property as well as all claims of any kind (including claims for
labor, materials, supplies and rent) which, if unpaid, might become a Lien upon
any or all of the property of the Borrower or such Corporate Guarantor;
provided, however, that the Borrower and the Corporate Guarantor shall not be
required to pay any such tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings diligently conducted by or on behalf of the Borrower or
such Corporate Guarantor, and if the Borrower or such Corporate Guarantor shall
have set up reserves therefor adequate under generally accepted accounting
principles.
Section 5.8 Performance of Obligations. The Borrower (a) shall pay the
Note according to the reading, tenor and effect thereof and (b) shall do and
perform, and shall cause each of the Guarantors to do and perform, every act and
discharge all of the obligations provided to be performed and discharged under
this Agreement, the Note and the Security Documents.
Section 5.9 Maintenance. The Borrower shall, and shall cause the
Corporate Guarantor to: (a) maintain its corporate existence; (b) maintain its
property (and any properties leased by or consigned to it or held under title
retention or conditional sales contracts) in good and workable condition at all
times and make all repairs, replacements, additions, betterments and
improvements to its property as are necessary to the continuation of the
business as it is presently conducted.
Section 5.10 Further Assurances. The Borrower shall (a) cure promptly
any defects in the creation and issuance of the Note, any Security Document or
the execution and delivery of this Agreement, and (b) at its expense, promptly
do such other acts and execute and deliver to the Bank all such other and
further documents, agreements and instruments as the Bank may request to carry
into effect the purposes of this Agreement, the Note or the Security Documents.
Section 5.11 Required Insurance. In addition to the requirements
provided in the Mortgage, as to all working interests owned by Borrower,
Borrower shall maintain at its sole cost, with financially sound and reputable
insurers acceptable to the Bank, insurance with respect to their respective
interests in the property against such liabilities, casualties, risks and
contingencies, including, but not limited to (i) comprehensive general liability
insurance, protecting against claims for bodily injury, death and/or property
damage arising out of the use, ownership, possession, operation and condition of
the property owned or operated by Borrower, and (ii) workmen's compensation
insurance, and in such types and amounts as is customary for Persons engaged in
the same or similar businesses and similarly situated.
Section 5.12 Conduct of Business. The Borrower shall, and shall cause
the Corporate Guarantor to, preserve and maintain all of its material leases,
privileges, franchises, qualifications and rights that are necessary or
desirable in the ordinary conduct of its business, and conduct its business as
presently conducted in an orderly and efficient manner in accordance with good
business practices. The Borrower shall perform, and shall cause the Corporate
Guarantor to perform, all material obligations it is required to perform under
the terms of each indenture, mortgage, deed of trust, security agreement, lease,
franchise agreement, operating agreement or other instrument or obligation to
which it is a party or by which it or any of its properties is bound.
-13-
Section 5.13 Title Opinion. Borrower shall, within thirty days of the
execution of this Agreement, and, at the sole discretion of the Bank, prior to
the initial Loan Advance to be made hereunder, deliver to the Bank an opinion of
counsel with respect to the Borrower's title in any of the Mortgaged Properties
not heretofore committed to a Mortgage in favor of the Bank, which opinion shall
confirm the priority of the deed of trust Lien on and security interest of the
Bank in the Mortgaged Properties covered by such opinion and the absence of any
defects in the Borrower's title to such Mortgaged Properties that could have a
material adverse effect on the Borrower's right, title and interest in the
Mortgaged Properties or that could result in any of the representations and
warranties of the Borrower with respect to the Mortgaged Properties being
untrue. The Bank may waive or modify this requirement, at its discretion, and
any such waiver or modification of this requirement shall not be deemed to be an
amendment of this Agreement except to the extent of the specific waiver or
modification.
Section 5.14 Information. The Borrower shall make available to the Bank
and its engineers, attorneys, or representatives, at any time requested,
Borrower's Files and if the Bank, or its representative, takes possession of the
Mortgaged Property pursuant to this instrument, any other Security Document, or
Law, the Bank shall be entitled to prompt possession of all Borrower's Files,
and should the Liens of any Security Document be foreclosed, the purchaser at
the resulting foreclosure sale shall be entitled to all Borrower's Files.
Section 5.15 Access to Mortgaged Properties. Borrower shall permit the
Bank and its accredited agents, representatives, and employees at all times, and
at their own expense to go upon, examine, inspect, and remain on the Mortgaged
Properties, and to go on the xxxxxxx floor of any well being drilled thereon.
Section 5.16 Maintenance of Borrower's Files. Borrower shall maintain
Borrower's Files, when applicable, as the same would be maintained by a
reasonable and prudent operator, in which full, true, and correct entries shall
be promptly made as to all operations, and all of Borrower's Files shall be
subject to inspection by the Bank and its duly accredited representatives and
attorneys during reasonable business hours; make a report of operations of the
Mortgaged Property for the period since the last report setting out all data as
to production, revenue, and expenses, prepared in such manner and in such form,
and as often as the Bank may request; deliver to the Bank as soon as
practicable, but in no event later than 60 days after the close of Borrower's
fiscal quarter (or calendar quarter if Borrower is not on a fiscal year),
Borrower's balance sheet as of the end of such quarter and a statement of
Borrower's profits and losses for such quarter and for the year to date; deliver
to the Bank as soon as practicable, but in no event later than 90 days after the
end of Borrower's fiscal year (or calendar year if Borrower is not on a fiscal
year), a report showing for such year the gross proceeds of the sale of
Hydrocarbons, the quantity so sold, the Taxes, and the operating and other
expenses deducted from, or paid out of, or with respect to, such proceeds, the
number of such xxxxx operated, drilled, completed, and abandoned, and such other
information as The Bank may reasonably request, and such financial statements
shall be prepared in a fashion as set forth above, shall be in reasonable
detail, and shall otherwise be satisfactory in form to the Bank; and comply with
the Bank's request, which request shall be Borrower's discretion to make, to
have Borrower's financial statements for such year reviewed and reported upon,
within 30 days before the end of Borrower's fiscal or calendar year, as the case
may be, at Borrower's sole cost and expense, by independent public accountants
acceptable to the Bank.
Section 5.17 Reservoir Reports. Within thirty (30) days of the
Borrowing Base Redetermination Date (or at such other time as the Bank may
request; provided, however, that the Bank shall not make such request more often
than once each calendar year), Borrower shall furnish, at Borrower's expense, a
report of an independent petroleum engineer or an engineering firm acceptable to
the Bank, covering the prior and future productivity of the Mortgaged Property,
which report will be prepared in such a manner and in such form as the Bank may
request. If the report contemplated herein is not delivered in a timely manner,
Borrower shall be deemed in default under the terms of this Agreement.
-14-
Section 5.18 Title Opinions. Furnish the Bank with copies of any title
opinions covering Borrower's interest obtained by Borrower (either before or
after the date hereof) on all of the Mortgaged Property when requested by the
Bank.
Section 5.19 Notice of Change of Address; Transfer or Division Orders;
Change of Purchaser. Upon the request of the Bank, Borrower will execute and
deliver to any persons, corporations or other entities which pay over to
Borrower the proceeds from the sale of production from the Mortgaged Properties
a written notice of change of address of Borrower so that all transmittals of
funds representing the proceeds from the sale of production shall be made to
Borrower in care of the Bank at the Bank's address, as set forth on the opening
page hereof. In addition, upon the request of the Bank, Borrower will execute
and deliver to the same persons or entities described above in this section
notices of the assignment of production provided for in the Mortgage, as well as
assignment of all monies and accounts related to the properties described in the
Mortgage, and shall require and direct that future payments attributable to such
production or such monies or accounts, including amounts then owing but unpaid,
shall be paid directly to the Bank. Finally, Borrower shall notify Bank of any
change of purchaser of the production from the Mortgaged Properties and shall
notify the Bank of the name and address of any such new purchaser.
ARTICLE 6. NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any amounts are due
under the Note or this Agreement unless the Bank shall otherwise give its prior
written consent:
Section 6.1 Debt. Borrower shall not, and shall not permit any
Corporate Guarantor to, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Debt, except:
(a) Debt owing to the Bank or to any Person holding, directly or
indirectly, all of the voting stock of the Bank; and
(b) Accounts payable incurred in the ordinary course of business; and
(c) The Debt identified on Schedule 6.1 and any renewals or extensions
thereof; provided, however, that the principal amount thereof shall not be
increased or the maturity date thereof accelerated; and
(d) Any Debt owing to the Guarantors; provided that such Debt is
effectively subordinated to the rights of the Bank pursuant to the terms of a
subordination agreement on a form acceptable to Bank.
Section 6.2 Liens. Borrower shall not, and shall not permit the
Corporate Guarantor to, make, create, incur, assume or permit to exist any Lien
or other encumbrance (including, without limitation, licenses, leases,
easements, and concessions) on any of its property (now owned or hereafter
acquired), except that the foregoing restrictions shall not apply to:
-15-
(a) Liens securing Debt owing to the Bank or to any Person holding,
directly or indirectly, all of the voting stock of the Bank;
(b) Liens for taxes, assessments and other governmental charges or
levies or the Liens, claims or demands of landlords, carriers, warehousemen,
mechanics, laborers, materialmen, operators (except with respect to the
Mortgaged Properties) and other like Persons arising by law in the ordinary
course of business for sums which are not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently conducted if
reserves adequate under generally accepted accounting principles shall have been
established therefor;
(c) easements, rights-of-way, restrictions, title irregularities and
other similar charges or encumbrances incurred in the ordinary course of
business and not materially interfering with (i) the ordinary conduct of the
business of the Borrower or such Corporate Guarantor, or (ii) the value of the
particular property upon which said easement, right-of-way, restrictions, title
irregularities or other similar charge or encumbrance is created;
(d) Liens disclosed on Schedule 6.2; or
(e) Liens disclosed on Exhibit B to any of the Mortgages.
Section 6.3 Dividends; Redemptions. The Borrower shall not, and shall
not permit the Corporate Guarantor to, declare or pay any dividend or make any
other distribution in respect of the capital stock (other than a dividend
payable in common stock) of the Borrower or the Corporate Guarantor or purchase,
retire, redeem or otherwise acquire for value any of such capital stock.
Section 6.4 Sale of Assets; Mortgaged Properties. (a) The Borrower
shall not, and shall not permit the Corporate Guarantor to, sell, lease,
transfer or otherwise dispose of any property material to the conduct of the
business of Borrower or such Corporate Guarantor, except for the sale of
Hydrocarbons in the ordinary course of business and the sale or disposal of
inventory or equipment in the ordinary course of business.
(b) The Borrower shall not (i) sell, lease, assign, transfer, abandon
or otherwise directly or indirectly dispose of all or any interest in any of the
Mortgaged Properties, (ii) forward sell production of Hydrocarbons from the
Mortgaged Properties pursuant to any arrangement that does not provide for full
payment therefor at the time of production and delivery or (iii) directly or
indirectly, create, incur, assume or suffer to exist any mineral fee interests,
overriding royalty and royalty interests, leasehold interests, interests in
production or any other interest in Hydrocarbons produced on the Mortgaged
Properties, other than those in effect on the date hereof and disclosed in the
Mortgage.
Section 6.5 Limitations on Contingent Liabilities. Borrower shall not,
and shall not permit the Corporate Guarantor to, enter into any guarantees or
otherwise become responsible, through indemnity, suretyship or any other
contractual relationship, contingently or otherwise, for the obligations of any
other Person, except endorsements of negotiable instruments for collection in
the ordinary course of business.
Section 6.6 Investments, Loans and Advances. The Borrower shall not,
and shall not permit the Corporate Guarantor to, make or permit to remain
outstanding any investments, loans or advances to any Person, except:
(a) investments in obligations of the United States government or any
agency thereof or obligations guaranteed by the United States government having
a maturity not in excess of one year;
-16-
(b) investments in certificates of deposit with any commercial banks
with a combined capital and surplus in excess of $100,000,000.00 and having
maturities not in excess of one year;
(c) repurchase agreements relating to investments described in Sections
6.9(a) and (b) with any Person with a combined capital and surplus in excess of
$100,000,000.00;
(d) commercial paper issued by any Person if at the time of purchase
such commercial paper is rated not less than "A-1" (or the then equivalent) by
the rating service of Standard & Poor's Corporation or not less than "P-1" (or
the then equivalent) by the rating service of Xxxxx'x Investors Service;
(e) loans or advances not exceeding $50,000 at any time outstanding to
the Corporate Guarantor;
(f) advances or extensions of credit in the form of accounts receivable
made in the ordinary course of business;
(g) loans, advances or extension of credit to the Corporate Guarantor
under applicable contracts or agreements in connection with oil and gas
development activities of the Borrower; or
(h) loans and advances to employees of the Borrower or any subsidiary
of the Corporate Guarantor made in the ordinary course of business not exceeding
$15,000 in the aggregate at any time outstanding.
Section 6.7 Mergers; etc. (a) The Borrower shall not, and shall not
permit the Corporate Guarantor to, merge or consolidate with any Person.
(b) The Borrower shall not issue any additional shares of capital stock
or any other securities convertible or exchangeable into its capital stock.
Section 6.8 Nature of Business. The Borrower will not permit any
material change to be made in the character of its business or the business of
the Corporate Guarantor as carried on at the date hereof.
Section 6.9 ERISA. Borrower will not, and will not permit the Corporate
Guarantor to, at any time sponsor, maintain or contribute to any Plan.
Section 6.10 Sale or Discount of Receivables. The Borrower shall not,
and shall not permit the Corporate Guarantor to, discount or sell with recourse
or sell for less than the market value thereof, any of its notes or accounts
receivables.
Section 6.11 Sale and Leasebacks. The Borrower shall not, and shall not
permit the Corporate Guarantor to, enter into any arrangement, directly or
indirectly, with any Person where the Borrower or such Corporate Guarantor shall
sell or transfer any property, whether now or hereafter acquired, and whereby
the Borrower or such Corporate Guarantor shall then or thereafter rent or lease
as lessee such property or any part thereof or any other property which the
Borrower or such Corporate Guarantor intends to use for substantially the same
purpose or purposes as the property sold or transferred.
Section 6.12 Transaction with Affiliates. The Borrower shall not enter
into any transaction (including without limitation, the purchase, sale or
exchange of any property or the rendering of any service) with any Affiliates
except transactions in the ordinary course of business and pursuant to the
-17-
reasonable requirements of the Borrower's business and upon fair and reasonable
terms no less favorable to the Borrower than the Borrower would obtain in a
comparable arms-length transaction with a Person not an Affiliate; provided,
however, that nothing in this Section 6.12 shall permit any transaction
prohibited by the other provisions of this Agreement.
Section 6.13 Environmental Matters. Except in material compliance with
the relevant Governmental Requirements, the Borrower will not cause or permit
any non-exempt Hazardous Material to be placed, held, located or disposed of on,
under or at any property now or hereafter owned, leased or otherwise controlled
directly or indirectly by Borrower or any Corporate Guarantor.
Section 6.14 Cancellation of Insurance. The Borrower shall not cause or
permit any insurance policy required to be carried hereunder to be terminated or
lapse or expire without provision for adequate renewal thereof.
Section 6.15 No Subsidiaries. The Borrower will not create or suffer to
exist any subsidiary of the Borrower.
Section 6.16 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default if such action is taken or
condition exists.
ARTICLE 7. DEFAULT
Section 7.1 Events of Default. Any of the following events shall be
considered an Event of Default:
(a) Default in the payment of any principal or interest on the Note
when it becomes due and payable, whether as a result of mandatory prepayment,
acceleration or otherwise;
(b) Default in the payment of any fees or expenses required to be paid
under this Agreement when the same become due and payable;
(c) The discovery by the Bank that any statement, representation or
warranty made by the Borrower or any Guarantor in this Agreement or the Security
Documents or by the Borrower in a certificate, instrument or statement delivered
to or in connection with this Agreement is false, misleading or erroneous in any
material respect when made;
(d) Default in the performance or breach of any covenant or agreement
contained in Sections 5 and 6 and the continuance of such default for a period
of ten (10) Business Days after the earlier of (A) receipt by the Borrower of
written notice thereof from the Bank or (B) the Borrower otherwise having
knowledge of such default or breach.
(e) Default in the performance or breach of any covenant or agreement
in this Agreement (other than as specified in Articles 5 and 6 of this Agreement
or otherwise provided for in this Section 7.1) or in any Security Document and
the continuance of such default or breach for a period of 30 days after the
earlier of (A) receipt by the Borrower of written notice thereof from the Bank;
or (B) the Borrower otherwise having knowledge of such default or breach;
(f) The Borrower or any Guarantor shall execute an assignment for the
benefit of their respective creditors or apply for or consent to the appointment
of any receiver, trustee or similar officer for it or all or any substantial
part of its property or assets, or such receiver, trustee or similar officer
shall be appointed without the application or consent of the Borrower or such
Guarantor and such appointment shall continue for a period of 30 days;
-18-
(g) The Borrower or any Guarantor shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, readjustment of debt, dissolution, liquidation or similar
proceeding relating to it under the laws of any jurisdiction.
(h) Any proceeding referred to in Section 7.1 (g) shall be instituted
against the Borrower or any Guarantor or any writ, warranty or attachment or
execution or similar process shall be issued or levied against a substantial
part of the property or assets of the Borrower or any Guarantor and such writ,
warrant of attachment or execution or similar process shall not be released,
vacated or fully bonded within 30 days after its issue or levy;
(i) An event of default (however defined) shall occur with respect to
any bond, debenture, note or other evidence of indebtedness of the Borrower
(other than this Agreement and the Note) or any Corporate Guarantor in an amount
exceeding $50,000 or under any indenture or other instrument under which such
indebtedness has been issued or by which it is governed and the expiration of
the applicable period of grace, if any, specified in such evidence of
indebtedness or indenture or instrument.
(j) Any change in one or more of the partners of Borrower, if Borrower
is a partnership (other than by reason of death or legal incapacity).
(k) Any change in one or more of the officers of Borrower, if Borrower
is a corporation (other than by reason of death or legal incapacity).
(l) Any change in ownership of more than 50% of the equity interests in
Borrower if Borrower is not one or more individuals.
(m) The failure of Borrower or any Guarantor to pay any money judgment,
writ, warrant of attachment, or similar process, involving an amount in excess
of $10,000.00, entered or filed against Borrower or any Guarantor, or any of
Borrower's or any Guarantor's assets that remains undischarged, unvacated,
unbonded, or unstayed for a period of ten days or in any event later than ten
days prior to the date on which the assets of Borrower or any Guarantor may be
sold to satisfy such judgment.
(n) The failure to have discharged within a period of ten days after
the commencement thereof, any attachment, sequestration, or similar proceedings
against any of Borrower's or any Guarantor's assets.
Section 7.2 Rights and Remedies. Upon the occurrence of an Event of
Default, the Bank may exercise any or all of the following rights and remedies:
(a) By notice to the Borrower, declare its commitment to make Loan
Advances terminated; provided, however, that upon the occurrence of an Event of
Default described in Section 7.1(f), (g) or (h), any commitment to make Loan
Advances shall terminate automatically without notice or any other action by the
Bank.
(b) By notice to the Borrower, declare the entire unpaid principal
amount of the Note outstanding, all interest accrued and unpaid thereon, and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Note, all such accrued interest and all such amounts shall become
and be forthwith due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that upon the occurrence of an Event of Default described in
Section 7.1(f), (g) or (h), the entire unpaid principal of the Note, all accrued
interest and all other amounts payable under this Agreement and the Note shall
be automatically due and payable without any notice or demand.
-19-
(c) Exercise or enforce any or all other rights or remedies available
to the Bank by applicable law, agreement or otherwise.
ARTICLE 8. MISCELLANEOUS
Section 8.1 Expenses. Borrower agrees to pay, reimburse, and save the
Bank harmless against liability for the payment of, all out-of-pocket expenses
arising in connection with any transaction contemplated by this Agreement which
may be payable in respect of the execution, delivery, performance or enforcement
of this Agreement, the Note and the Security Documents, and the fees and
expenses of the Bank's counsel (a) in connection with the negotiation,
preparation, execution and delivery of any modifications to this Agreement, the
Note and the Security Documents, (b) the administration of any of the foregoing,
and (c) all amounts reasonably expended, advanced or incurred by the Bank to
satisfy any obligation of the Borrower under this Agreement, or to collect the
Note, or to enforce the rights of the Bank under this Agreement, the Note or any
of the Security Documents, including, but not limited to, fees of auditors and
accountants, and investigation expenses incurred by the Bank in connection with
any such matters. The obligations of Borrower hereunder shall survive payment of
the amounts due under the Note.
Section 8.2 Indemnification. The Borrower hereby agrees to indemnify
and defend the Bank and its directors, officers, agents, employees and special
counsel (the "Indemnified Persons") from and hold each of them harmless against
any and all losses, liabilities, claims, damages, deficiencies, interest,
judgments, expenses, suits, actions, obligations, penalties and disbursements,
including, without limitation, reasonable legal and investigative fees and
expenses of whatever kind and nature (the "Liabilities") which may be incurred
by or imposed, at any time, in any way relating to or arising out of or alleged,
by a Person other than such Indemnified Person to in any way relate to or arise
out of (i) any of the transactions contemplated by this Agreement; (ii) any
violation by the Borrower or the Corporate Guarantor of any Governmental
Requirement including but not limited to any Environmental Laws or any laws or
regulations relating to Hazardous Material, treatment, storage, disposal,
generation and transportation, air, water and noise pollution, soil or ground or
water contamination, the handling, storage or release into the environment of
Hazardous Materials; or (iii) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from, properties utilized by
Borrower or the Corporate Guarantor in the conduct of its business into or upon
any land, the atmosphere, or any watercourse, body of water or wetland, of any
Hazardous Material (including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under the
Environmental Laws), provided, however, that the foregoing indemnity with
respect to any Indemnified Person shall not extend to any Liabilities resulting
from the gross negligence or willful misconduct of such Indemnified Person. If
any such claim or action shall be brought against any Indemnified Person that
the Indemnified Person believes would be indemnified against hereunder, such
Indemnified Person shall give prompt notice to the Borrower. Upon receipt of
such notice of any claim by Borrower from an Indemnified Person, the Borrower
shall be entitled to participate in the joint defense thereof. The provision of
and undertakings and indemnifications set out in this Section 8.2 shall survive
the satisfaction, payment and performance of the obligation and the termination
of this Agreement.
-20-
Section 8.3 Waivers. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT, THE Note AND THE SECURITY DOCUMENTS, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, CONSENTS THAT ANY SUCH ACTION
OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT ANY SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM,
AGREES NOT TO PLEAD OR CLAIM ANY SUCH OBJECTION AND AGREES THAT AND HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS ARTICLE 8
Section 8.4 Applicable Law. THIS AGREEMENT AND Note SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS
OF THE STATE OF TEXAS.
Section 8.5 Notices. Except as may otherwise be expressly provided
herein, any notice herein required or permitted to be given shall be in writing
or by telephone or facsimile transmission with subsequent written confirmation,
and may be personally served or sent by United States mail and shall be deemed
to have been given when sent or transmitted, as the case may be. For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 8.5) shall be as set forth in
the opening paragraph of this Agreement.
Section 8.6 Survival of Warranties and Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement.
Section 8.7 Waiver; Remedies Cumulative. No failure or delay on the
part of the Bank in the exercise of any power, right or privilege hereunder or
under the Note shall impair such power, right or privilege or operate as a
waiver thereof; nor shall any single or partial exercise of any such power,
right, or privilege preclude any other or further exercise thereof or of any
other right, power or privilege. The powers, rights, privileges and remedies
herein provided are cumulative and not exclusive of any rights, powers,
privileges or remedies provided by law or in equity.
Section 8.8 Severability. In case any provision in or obligation under
this Agreement or the Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 8.9 Entire Agreement. This Agreement, the Security Documents
and the various additional agreements and documents contemplated hereby contain
the entire agreement of the parties concerning the subject matter hereof. In the
event of irreconcilable conflict between this Agreement and the other documents
contemplated hereby, the provisions of this Agreement shall control.
This Agreement supercedes the following agreements entered into by and
between the Bank and Borrower and the Corporate Guarantor:
(a) Credit Agreement dated June 21, 1999, entered into by and
between Borrower and Bank, pertaining to a Term Loan in the
original principal amount of $500,000;
(b) Credit Agreement dated August 18, 1999, entered into by and
between Borrower and Bank, pertaining to a Term Loan in the
original principal amount of $125,000.
-21-
Both Borrower and the Bank warrant and represent that the entire
agreement made between them is contained within this Agreement, as defined
herein, as the same may be amended or supplemented from time to time, and that
no agreements or promises exist between the Parties that are not reflected in
the language of the various documents executed in conjunction with this
transaction.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 8.10 Further Assurances. At any time or from time to time upon
the request of the Bank, Borrower will execute and deliver such further
documents and do such other acts and things as the Bank may reasonably request
in order to effect fully the purposes of this Agreement, the Note and the
Security Documents.
Section 8.11 Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for an other purpose or be given any substantive effect.
Section 8.12 Successors and Assigns; Subsequent Holders of the Note.
This Agreement shall be binding upon the parties hereto and their respective
permitted successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Bank. Borrower's rights or any
interest therein hereunder may not be assigned without the consent of the Bank.
Borrower hereby agrees that any disposition of the Note or an interest therein,
will give rise to a direct obligation of Borrower to the subsequent holder of
the Note and the subsequent holder shall for all purposes be considered a the
Bank and shall have all rights of the Bank arising under this Agreement and the
Note.
Section 8.13 Amendments. No amendment or waiver of any provision of
this Agreement shall be effective unless the same shall be in writing and signed
by the Borrower and the Bank.
Section 8.14 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
Section 8.15 Joinder. The undersigned accommodation makers and
guarantors join in the execution hereof to evidence their approval of the terms
and conditions herein set forth and their agreement to be bound by such terms
and conditions and to perform their obligations under each Note and Guaranty. In
respect of each such obligation, which is also an obligation of the Borrower,
the undersigned accommodation makers and guarantors and Borrower shall be
jointly and severally obligated thereon.
-22-
IN WITNESS WHEREOF, the parties have caused this Credit Agreement to be
executed the day and year first above written.
UNION PLANTERS BANK, N.A.
By:
-------------------------------------
Xxxxxxx Xxxxxx, Senior Vice President
FIELDPOINT PETROLEUM CORPORATION
By:
-------------------------------------
Xxx X. Xxxxxx, Xx., President
GUARANTORS:
BASS PETROLEUM, INC.
By:
-------------------------------------
Xxx X. Xxxxxx, Xx., President
-------------------------------------
Xxx X. Xxxxxx, Xx.
The following jurat is included for purposes of the declaration
regarding the purpose of the Loan as set forth on Annex A:
SUBSCRIBED AND sworn to before me by Xxx X. Xxxxxx, Xx., this 14th day
of December, 2000.
[stamp]
-------------------------------------------
Notary Public in and for the State of Texas
-23-
ANNEX A
Essential Loan Terms
Borrower: Name: FieldPoint Petroleum Corporation
Address: X.X. Xxx 000000
Xxxxxx, Xxxxx 00000
Telephone: 512/250-8692
Telecopier: 512/335-1294
Tax ID number: 00-0000000
Purpose of Revolving Line of Credit:: For acquisition of properties and to
provide working capital.
Borrower warrants that the Revolving Line of Credit is to be used solely for
business, commercial or agricultural purposes. Borrower further warrants that
the Revolving Line of Credit is specifically exempted under Section 226.3 (a) of
Regulation Z issued by the Governors of the Federal Reserve System under Title I
(viz., the Truth in Lending Act) and Title V (viz., General Provisions) of the
Consumer Protection Act, and that no disclosures are required to be given under
such regulations and federal laws in connection with the Revolving Line of
Credit. Borrower further acknowledges that Lender is in reliance upon the truth
of the foregoing statements and that Lender is making the Revolving Line of
Credit without giving to Borrower the disclosures that may otherwise be required
under such laws and regulations.
Original Principal Amount of Revolving Line of Credit (Section 2.1): $2,000,000
Schedule for Revolving Line of Credit Advances (Section 2.1):
Any amount, which combined with all prior draws and combined with the
unpaid principal balances on Loan Nos. 27828 (dated June 21, 1999, in
the original principal amount of $500,000) and 27955 (dated August 18,
1999, in the original principal amount of $125,000), will not exceed
the sum of $2,000,000, may be drawn upon one Business Day's written
notice to the Bank in the form of Annex C by an officer of Borrower.
Each draw shall be deposited in Borrower's designated account.
Interest Rate and Manner of Calculation (Section 2.2(b)):
The prime rate of interest, as quoted in the Wall Street Journal, plus
one percent (1%), floating
Maturity Date (Section 2.3(a)): April 1, 2002
Initial Borrowing Base: $2,000,000
Borrowing Base Redetermination Date: May 1 and November 1 annually during the
term of the loan
Monthly Borrowing Base Reduction: One fiftieth of the aggregate borrowing base
in the first month and a fractional reduction
each succeeding month equal to a fraction the
numerator of which is one and the denominator
of which is the denominator of the preceding
month minus one.
Effective Date of Initial Borrowing Base Reduction: January 25, 2001
Payment Schedule and Commencement Date (Section 2.3(a)):
Commencing on January 25, 2001, Borrower shall pay to Bank 1/50th of
the outstanding principal balance, together with all accrued and unpaid
interest; on February 25, 2001, Borrower shall pay to Bank 1/49th of
the outstanding principal balance, together with all
accrued and unpaid interest; on March 25, 2001, Borrower shall pay to
Bank 1/48th of the outstanding principal balance, together with all
accrued and unpaid interest; and continuing on the twenty-fifth day of
each succeeding calendar month until the Maturity Date, Borrower shall
pay a fraction of the outstanding principal balance, the numerator of
which shall be one and the denominator of which shall be the
denominator of the preceding month less one. On the Maturity Date
Borrower shall pay to Bank all remaining unpaid principal and accrued
and unpaid interest. Commencing on January 25, 2001, Borrower shall pay
to Bank all accrued and unpaid interest, and on the twenty-fifth day of
each succeeding calendar month until the Maturity Date Borrower shall
continue to pay Bank all accrued and unpaid interest.
Revolving Line of Credit Advance Origination Fee (Section 2.2(a)): none
Original Transaction Fee (Section 2.3(c)): $15,000.00
Minimum Prepayment Amount (Section 2.4): none
Borrowing Base Redetermination Fee (Section 2) For each redetermination of the
Borrowing Base, Borrower shall
reimburse the Bank for all
engineering and related expenses
incurred by Bank in connection
with such redetermination,
including a reasonable charge
for services performed by
employees of the Bank or its
affiliates.
Corporate Guarantor: Bass Petroleum, Inc.
P. O. Xxx 000000
Xxxxxx, Xxxxx 00000
Individual Guarantor: Xxx X. Xxxxxx, Xx.
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
512/335-6920
ANNEX B
PROMISSORY NOTE
================================================================================
[See attached.]
PROMISSORY NOTE
--------------------------------------------------------------------------------
$2,000,000.00 December 14, 2000
Maker: FIELDPOINT PETROLEUM CORPORATION Payee: UNION PLANTERS BANK, N.A.
P.O. Box 200685 0000 Xxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned Maker named above
promises to pay to the order of Payee named above at its offices at the address
set forth above in lawful money of the United States of America, the principal
sum of TWO MILLION and NO/100 DOLLARS ($2,000,000.00), or so much thereof as may
be advanced and outstanding against this Note pursuant to the Revolving Credit
Agreement of even date herewith by and between Maker and Payee (as amended,
supplemented or restated from time to time, the "Credit Agreement"), together
with interest on the principal balance from time to time remaining unpaid at the
rate and upon the terms provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitled the
holder hereof to accelerate the maturity of all amounts due hereunder. Unless
otherwise defined herein or unless the context hereof otherwise requires, each
term used herein with its initial letter capitalized has the meaning given to
such term in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is payable as
provided in the Credit Agreement. Subject to compliance with the applicable
provisions of the Credit Agreement, Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or fee, but such
payment shall not, until this Note is fully paid and satisfied, excuse the
payment as it becomes due of any payment on this Note provided for in the Credit
Agreement.
Without being limited thereto or thereby, this Note is secured by the
Security Documents.
IN WITNESS WHEREOF, the undersigned has executed this note as of the
day and year first above written.
MAKER:
FIELDPOINT PETROLEUM CORPORATION
a Colorado corporation
By:
-----------------------------
Xxx X. Xxxxxx, President
ANNEX C
SCHEDULE OF MORTGAGES
================================================================================
--------------------------------------------------------------------------------
LIENS granted by FieldPoint Petroleum Corporation for the benefit of
Union Planters Bank, N.A., each dated August 18, 1999, originally given
to secure the repayment of a Note in the original principal amount of
$500,000
--------------------------------------------------------------------------------
Coal County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement Aug. 24, 1999 Clerk's File No. 99711, UCC Records
Mortgage Aug. 24, 1999 Book 581, page 741, Real Property Records
Xxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement August 23, 1999 Clerk's File No. 555, UCC Records
Mortgage August 23, 1999 Book 1516, page 439, Real Property Records
XxXxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement Aug. 23, 1999 Clerk's File No. 677, UCC Records
Mortgage Aug. 23, 1999 Book 1525, page 15, Real Property Records
Oklahoma County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement September 27, 1999 Clerk's File No. N0007023, UCC Records
Mortgage September 28, 1999 Book 7692, page 1065, Real Property Records
Pontotoc County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement September 23, 1999 Clerk's File No. 971, UCC Records
Mortgage September 23, 1999 Book 1549, page 391, Real Property Records
--------------------------------------------------------------------------------
LIENS granted by FieldPoint Petroleum Corporation for the benefit of
Union Planters Bank, N.A., each dated June 21, 1999, originally given
to secure the repayment of a Note in the original principal amount of
$500,000
--------------------------------------------------------------------------------
Xxxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 394, UCC Records
Mortgage July 19, 1999 Book 787, page 234, Real Property Records
Caddo County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 17, 1999 Clerk's File No. 1134, UCC Records
Mortgage Aug. 12, 1999 Book 2249, page 319, Real Property Records
-1-
Xxxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement Aug. 16, 1999 Clerk's File No. 1080, UCC Records
Mortgage Aug. 16, 1999 Book 3431, page 244, Real Property Records
Comanche County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement Aug. 25, 1999 Clerk's File No. R000922, UCC Records
Mortgage Aug. 25, 1999 Book 3284, page 215, Real Property Records
Coal County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 20, 1999 Clerk's File No. R0684, UCC Records
Mortgage July 20, 1999 Book 581, page 97, Real Property Records
Creek County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 915, UCC Records
Mortgage July 19, 1999 Book 408, page 454, Real Property Records
Xxxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 596, UCC Records
Mortgage July 19, 1999 Book 1075, page 215, Real Property Records
Xxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 708, UCC Records
Mortgage July 19, 1999 Book 1114, page 464, Real Property Records
Xxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 911-L, UCC Records
Mortgage July 19, 1999 Book 3129, page 338, Real Property Records
Xxxxxxx County, Oklahoma*
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July __, 1999 Clerk's File No. _____, UCC Records
Mortgage July __, 1999 Book ____, page ___, Real Property Records
Xxxxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 20, 1999 Clerk's File No. 283, UCC Records
Mortgage July 20, 1999 Book 543, page 707, Real Property Records
-2-
XxXxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 20, 1999 Clerk's File No. 1598, UCC Records
Mortgage July 20, 1999 Book 1288, page 387, Real Property Records
Xxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 473, UCC Records
Mortgage July 19, 1999 Book 1512, page 322, Real Property Records
XxXxxxx County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 577, UCC Records
Mortgage July 19, 1999 Book 1521, page 884, Real Property Records
Oklahoma County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement Aug. 18, 1999 Clerk's File No. 42180, UCC Records
Mortgage July 26, 1999 Book 7645, page 943, Real Property Records
Oklahoma County, Oklahoma - Statewide UCC Filings
Financing Statement Filed August 18, 1999; Clerk's File No. 42181
Pittsburg County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 21, 1999 Clerk's File No. 1122, UCC Records
Mortgage July 21, 1999 Book 1014, page 314, Real Property Records
Pontotoc County, Oklahoma
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July 19, 1999 Clerk's File No. 725, UCC Records
Mortgage July 19, 1999 Book 1544, page 438, Real Property Records
Washita County, Oklahoma*
Instrument Date filed Recording data
---------- ---------- --------------
Financing Statement July __, 1999 Clerk's File No. _____, UCC Records
Mortgage July __, 1999 Book ____, page ___, Real Property Records
-------------------
* Not returned by County Clerk as of August 12, 1999.
--------------------------------------------------------------------------------
LIENS granted by Bass Petroleum, Inc., for the benefit of Union
Planters Bank, N.A., each dated June 18, 1998, originally given to
secure the repayment of a Note in the original principal amount of
$125,000
--------------------------------------------------------------------------------
Deed of Trust, recorded in Volume 1059, page 364, Official Public Records,
Fayette County, Texas.
Financing Statement, filed April 14, 1999, under Clerk's File Xx. 00000, Xxxxxxx
Xxxxxx, Xxxxx, and filed April 14, 1999, under Clerk's File No. 99-074409 in the
office of the Secretary of State of Texas.
-3-
--------------------------------------------------------------------------------
LIENS granted by Bass Petroleum, Inc., for the benefit of Union
Planters Bank, N.A., each dated December 18, 1996, originally given to
secure the repayment of a Note in the original principal amount of
$500,000
--------------------------------------------------------------------------------
Jurisdiction Type of Instrument Dated filed Recording data
------------ ------------------- ----------- --------------
Bastrop County, Texas Deed of Trust 12-30-96 Volume 830, page 677,
Official Records
Financing Statement 12-30-96 Clerk's File No.41
Xxx County, Texas Deed of Trust 12-23-96 Volume 791, page 65,
Real Property Records
Financing Statement 12-23-96 Clerk's File No. 13151
Secretary of State Financing Statement 12-27-96 File Stamp
No. 96-255364
--------------------------------------------------------------------------------
LIENS granted by Bass Petroleum, Inc., for the benefit of Merchants
Bank, the predecessor in interest of Union Planters Bank, N.A., each
dated September 9, 1996, originally given to secure the repayment of a
Note in the original principal amount of $100,000
--------------------------------------------------------------------------------
Jurisdiction Type of Instrument Dated filed Recording data
------------ ------------------- ----------- --------------
Converse County WY Deed of Trust 09-17-96 Clerk's file No. 823078
and recorded in Book
1099, page 288,
Mortgage Records
Financing Statement 09-17-96 Clerk's file No. 823079
Secretary of State Financing Statement 09-17-96 Clerk's file
Xx. 00000-00-0X00
-0-
XXXXX X
FORM OF GUARANTY AGREEMENT
================================================================================
[attached]
GUARANTY AGREEMENT
--------------------------------------------------------------------------------
THIS GUARANTY AGREEMENT, dated as of December 14, 2000, is executed by
and between each of the following named parties whose addresses, telephone and
telecopier numbers are set forth with their respective names:
XXX X. XXXXXX, XX. and BASS PETROLEUM, INC. (collectively "Guarantors")
0000 Xxxxxxxxx P. O. Xxx 000000
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Telephone: 512/000-0000 Telephone: 512/000-0000
and
UNION PLANTERS BANK, N.A. ("Assignee")
a national banking corporation
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: 713/000-0000
Telecopier: 713/867-7439
Attention: Xxxxxxx Xxxxxx, Senior Vice President
W I T N E S S E T H:
WHEREAS, the Bank and FieldPoint Petroleum Corporation, a Colorado
corporation ("FieldPoint"), have entered into that certain Revolving Credit
Agreement dated of even date herewith (the "Credit Agreement"), pursuant to
which the Bank has agreed to loan to FieldPoint the sum of $2 million, on the
terms set forth in the Credit Agreement, which loan is secured by certain oil
and gas properties and related rights in accordance with the terms and
conditions provided therein; and
WHEREAS, it is a condition precedent of the Credit Agreement that
Guarantors shall execute and deliver to the Bank a satisfactory guaranty of the
obligations of FieldPoint set forth in the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and of Ten Dollars and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledge, Guarantor and the Bank hereby agree as follows:
Section 1. Definitions. The following terms shall have the following
meanings:
"Guarantied Obligations" means collectively all of the undertakings
which are guaranteed by Guarantors and described in Section 2. hereof.
Section 2. Guaranty.
(a) Guarantors hereby irrevocably, absolutely, and
unconditionally guarantee and agree with the Bank that:
(i) FieldPoint shall perform, in all material
respects, all duties, obligations and undertakings set froth in the Credit
Agreement; and
(ii) all sums payable by FieldPoint under the Note or
under the Credit Agreement will be promptly paid in full when due in accordance
with the provisions thereof.
-1-
(b) If FieldPoint shall for any reason fail to perform any
Guarantied Obligation, Guarantors will either:
(i) cause such Guarantied Obligation to be promptly
and fully performed, or, at the Bank's election,
(ii) make all payments to the Bank which may from
time to time be required of FieldPoint.
(c) Regardless of whether the Bank is (at any time) precluded
or stayed from enforcing or exercising any of its rights or remedies under the
Credit Agreement or any related instrument or document (collectively, the
"Operative Documents") against Guarantors, such rights and remedies may be
enforced directly against Guarantors, as a primary obligation of Guarantors,
without the joinder of, demand on or the taking of any other action against
FieldPoint or any other person. Regardless of whether FieldPoint or any person
is precluded or stayed from (or otherwise fails to) pay or perform any of the
Guaranteed Obligations (upon demand by the Bank), Guarantors shall pay or
perform (or cause to be paid or performed) such Guaranteed Obligations. Without
limiting the foregoing provisions, if enforcement of the rights or remedies of
the Bank under the Operative Documents is dependent upon delivering notices or
taking any other actions (such as delivering a demand), then the Bank may
deliver such notices to and take such other action with or against Guarantors
(in lieu of FieldPoint) for all purposes under this Agreement and the Operative
Documents. Nothing herein requires the Bank to first exercise or exhaust
remedies against FieldPoint or any other person before exercising remedies
against Guarantors pursuant to this Agreement.
Section 3. Successors and Assigns. Guarantors' rights or obligations
hereunder may not be assigned or delegated. This Guaranty shall apply to and
inure to the benefit of the Bank and its successors and assigns.
Section 4. Representations and Warranties. Guarantors hereby represent
and warrant as follows:
(a) The recitals at the beginning of this Guaranty are true
and correct in all respects.
(b) This Guaranty is a legal, valid and binding obligation of
Guarantors, enforceable against Guarantors in accordance with its terms except
as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights and by general equitable
principles.
(c) There is no action, suit or proceeding pending or, to the
knowledge of Guarantors, threatened against or otherwise affecting Guarantors
before any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality which may materially and adversely affect
Guarantors' financial condition or Guarantors' ability to perform Guarantors'
obligations hereunder.
Section 5. Nature of Guaranty. This Agreement is (a) irrevocable,
unconditional and absolute; (b) a guaranty of payment, performance and
compliance and not of collection; and (c) in no way conditioned or contingent
upon any attempt to collect from or enforce performance or compliance by
FieldPoint, or upon any other event, contingency or circumstance whatsoever.
This Agreement and the Guaranteed Obligations shall be binding upon and against
Guarantors without regard to the validity or enforceability of any of the
Operative Documents, or any provision thereof, and Guarantors hereby waive any
defense relating to the enforceability of such documents or any provision
contained therein. Guarantors also agree to pay to the Bank such further amounts
as shall be sufficient to cover the costs of collecting or enforcing the
Guaranteed Obligations or otherwise enforcing this Agreement (including
reasonable fees, expenses and disbursements of its counsel).
-2-
Section 6. Guarantors' Obligations Unconditional. The covenants,
agreements and duties of Guarantors set forth in this Agreement shall not be
subject to any counterclaim, setoff, deduction, diminution, abatement, stay,
recoupment, suspension, deferment, reduction or defense (other than full and
strict compliance or performance by Guarantors with Guarantors' obligations
hereunder) based upon any claim that Guarantors, or any other person, may have
against the Bank or any other person, and shall remain in full force and effect
without regard to, and shall not be released, discharged or in any way affected
by, any circumstance or condition whatsoever (whether or not Guarantors or the
Bank shall have knowledge or notice thereof or shall have assented thereto and
notwithstanding the fact that no rights were reserved against Guarantors in
connection therewith).
Section 7. No Subrogation. GUARANTORS HEREBY WAIVE ANY AND ALL RIGHTS
OF SUBROGATION, INDEMNIFY, CONTRIBUTION OR REIMBURSEMENT, ANY BENEFIT OF, OR
RIGHT TO ENFORCE ANY REMEDY THAT THE BANK NOW HAS OR MAY HEREAFTER HAVE AGAINST
FIELDPOINT IN RESPECT OF THE GUARANTEED OBLIGATIONS, OR ANY PROPERTY, NOW OR
HEREAFTER HELD BY FIELDPOINT AS SECURITY FOR THE GUARANTEED OBLIGATIONS AND ANY
AND ALL SIMILAR RIGHTS GUARANTORS MAY HAVE AGAINST THE CORPORATION UNDER
APPLICABLE LAW OR OTHERWISE. If, notwithstanding the foregoing, any amount shall
be paid to Guarantors on account of any such subrogation, indemnification,
contribution or reimbursement rights at any time, such amount shall be held in
trust for the benefit of the Bank and shall forthwith be paid to the Bank to be
credited and applied against the Guaranteed Obligations, whether matured,
unmatured, absolute or contingent, as the Bank may see fit in its discretion.
Section 8. Security. This Agreement shall be secured by the Mortgages
listed on the attached Exhibit A, to which reference is here made for all
purposes, each of which is being modified by agreements of even date herewith to
be applicable to the Guaranteed Obligations.
Section 9. Non-Exclusive Remedies. No right or remedy of the Bank under
any Operative Document shall be exclusive of any other right, power or remedy,
but shall be cumulative and in addition to any other right, power or remedy
thereunder or now or hereafter existing by law or in equity and the exercise by
the Bank of any one or more of such rights, powers or remedies shall not
preclude the simultaneous or further exercise of any or all of such other
rights, powers or remedies. Any failure to insist upon the strict performance of
any provision hereof or to exercise any option, right, power or remedy contained
herein shall not constitute a waiver or relinquishment thereof for the future.
Receipt by the Bank of any amount payable under any Operative Document with
knowledge of a default or event of default shall not constitute a waiver of such
default or event of default, and no waiver by the Bank or any provision of the
Operative Documents shall be deemed to be made unless made in writing. The Bank
shall be entitled to injunctive relief in case of the violation or attempted or
threatened violation of any of the provisions of the Operative Documents by any
other party hereto, a decree compelling performance or any of the provisions
hereof, or any other remedy allowed by Law or in equity.
Section 10. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable, then the remaining provisions or the application of such
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall continue to be valid and enforceable. The provisions of
this Section 9 shall not be construed to limit the rights of the Bank to
exercise remedies as a consequence of an event of default arising under any
Operative Document.
-3-
Section 11. Governing Law and Submission to Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY OPERATIVE
DOCUMENT, OR ANY CONVEYANCING DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, GUARANTORS HEREBY ACCEPT FOR
GUARANTORS AND IN RESPECT OF GUARANTORS' PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. GUARANTORS HEREBY
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH GUARANTORS MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND
DOES NOT PRECLUDE THE BANK FROM OBTAINING JURISDICTION OVER GUARANTORS IN ANY
COURT OTHERWISE HAVING JURISDICTION.
Section 12. Entire Agreement. The parties hereto acknowledge and agree
that this Guaranty and the Operative Documents represent all of the agreements
and understandings relating to the transactions contemplated by such documents
as between the Bank, on the one hand, and Guarantors and their affiliates on the
other hand, and the parties hereto acknowledge and agree that all prior written
and oral agreements or understandings between or among such persons are hereby
superseded in their entirety.
Section 13. Interpretation and Reliance. No presumption will apply in
favor of any party hereto in the interpretation of the Operative Documents or in
the resolution of any ambiguity of any provision hereof or thereof. Guarantors
acknowledge that it has not relied upon any statements, representations or
warranties of the Bank in entering into this guaranty.
Section 14. Time. TIME IS OF THE ESSENCE IN THIS AGREEMENT, AND THE
TERMS HEREIN SHALL BE SO CONSTRUED.
Section 15. Reasonableness Standard. If and when in this Agreement any
party is required to exercise any discretion in a "reasonable" manner, the
parties hereto acknowledge that the term "reasonable" or "reasonably" shall have
the meaning given to such term under (and shall be consistent with any standard
of commercial reasonableness implied by) the laws of the State of Texas in
effect as of the date hereof.
Section 16. No Oral Change. No amendment of any provision of this
Guaranty shall be effective unless it is in writing and signed by Guarantors and
the Bank, and no waiver of any provision of this Guaranty, and no consent to any
departure by Guarantors therefrom, shall be effective unless it is in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 17. Headings and References. The headings used herein are for
purposes of convenience only and shall not be used in construing the provisions
hereof. the words "this Guaranty," "this instrument," "herein", "hereof,"
"hereby" and words of similar import refer to this Guaranty as a whole and not
to any particular subdivision unless expressly so limited. The word "or" is not
exclusive. Pronouns in masculine, feminine and neuter genders shall be construed
to include any other gender, and words in the singular form shall be construed
to include the plural and vice versa, unless the context otherwise requires.
-4-
Section 18. Term. The term of this Guaranty shall be the earlier of the
full payment of the Guaranteed Obligations or sixty (60) months from the date
hereof.
Section 19. Notices. Any notice or communication required or permitted
hereunder shall be given in writing, sent by (a) personal delivery, (b)
expedited delivery service with proof of delivery, (c) registered or certified
United States mail, postage prepaid, or (d) telegram or telex, addressed to the
appropriate party at the address set forth in the opening paragraph of this
Agreement or to such other address or to the attention of such other individual
as hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to have
been given either at the time of personal delivery or, in the case of delivery
service or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or in the case of telegram or telex, upon
receipt.
IN WITNESS WHEREOF, Guarantors have executed and delivered this
Guaranty as of the date first above written.
GUARANTORS: BANK:
BASS PETROLEUM, INC. UNION PLANTERS BANK, N.A.
By: By:
------------------------------ -------------------------------------
Xxx X. Xxxxxx, Xx., President Xxxxxxx Xxxxxx, Senior Vice President
------------------------------
Xxx X. Xxxxxx, Xx.
-5-
ANNEX E
FORM OF ADVANCE CERTIFICATE
================================================================================
ADVANCE CERTIFICATE
--------------------------------------------------------------------------------
I, Xxx X. Xxxxxx, Xx., the duly elected President of FieldPoint
Petroleum Corporation, a Colorado corporation ("Borrower"), do hereby certify
that:
1. This Certificate is furnished pursuant to Section 2.1 of the Credit
Agreement (the "Agreement") between Borrower and Union Planters Bank,
N.A., dated as of December 14, 2000. Unless otherwise defined herein,
capitalized terms used in this Certificate have the meanings assigned
to such terms in the Agreement;
2. Borrower requests an Advance of $____________________ on ______________
, 200__;
3. The representations and warranties made by Borrower and the Guarantors
in the Agreement and Security Documents are true and correct as of the
date hereof as though made on and as of the date hereof;
4. No Event of Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by the Agreement on
the date hereof;
5. Borrower has performed and complied with all agreements and conditions
in the Agreement required to be complied with prior to the date of the
above requested Advance; and
6. I have carefully examined this Certificate and assert that all of the
statements and representations contained herein are true to the best of
my knowledge, information and belief.
IN WITNESS WHEREOF, I have executed this certificate as of the day of ,
200__.
__________________________________
Xxx X. Xxxxxx, Xx.
ANNEX F
SECURITY AGREEMENT COVERING BANK ACCOUNT
================================================================================
[attached]
