1
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT (hereinafter referred to as the
"Third Amendment"), dated as of January 28, 1997, is made by and between XXXXXX
PRODUCTION SERVICES, INC. ("Xxxxxx"), a Texas corporation, whose principal
business address is at 000 X.X. Xxxx 000, Xxxxx 000, Xxx Xxxxxxx, Xxxxx
00000-0000, and THE FROST NATIONAL BANK, a national banking association with
its principal place of business at 000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxx
00000 (the "Bank").
RECITALS
A. On or about November 30, 0000, Xxxxxx Xxxx Servicing, Inc., a
Texas corporation and Xxxxxx WellTech, L.C., a Texas limited
liability company and Bank entered into that certain Loan
Agreement (the "Agreement") concerning the terms, conditions
and covenants of that certain $13,000,000.00 Term Loan from
Bank to WellTech and that certain $4,000,000.00 Revolving
Credit Facility in favor of Xxxxxx Well Servicing.
B. The Loan Agreement was amended by First Amendment to Loan
Agreement dated November 28, 1995 and was subsequently amended
by Second Amendment to Loan Agreement dated December 4, 1996.
C. Since the date of the First Amendment, Xxxxxx Well Servicing,
Inc. and Xxxxxx WellTech, L.C. have been merged and a new
company formed, Xxxxxx Production Services, Inc.
D. This Third Amendment is to amend the Loan Agreement to extend
the maturity date of the $4,000,000.00 Revolving Credit Facility
to March 31, 1997.
E. All capitalized terms not otherwise defined in this Third
Amendment shall have the same meanings as are set forth in the
Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises herein contained, Bank and Xxxxxx agree as follows:
AGREEMENTS
1. The definition of "Borrowers" or "Borrower" as set forth in the
Loan Agreement and in Appendix A to the Loan Agreement shall
hereinafter mean Xxxxxx Production Services, Inc.
2
2. The $4,000,000.00 Revolving Credit Facility is renewed and shall
be evidenced by a Promissory Note in the original principal
amount of $4,000,000.00 dated January 28, 1997 executed by
Xxxxxx Production Services, Inc. and payable to the order of
Bank.
3. Except as specifically modified or amended herein, all terms,
provisions and requirements of the Agreement shall remain as
written, and as amended from time to time. Borrowers hereby
reaffirm all covenants, conditions, representations and
warranties contained in the Agreement, as amended.
NOTICE TO COMPLY WITH STATE LAW
For the purpose of this Notice, the term "WRITTEN AGREEMENT" shall
include the document set forth above, together with each and every other
document relating to and/or securing the same loan transaction, regardless of
the date of execution.
THIS WRITTEN 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.
EXECUTED as of the day and year first above written.
BORROWER:
XXXXXX PRODUCTION SERVICES, INC.,
a Texas corporation
By:
------------------------------------
Xxxxxxx X. Xxxxxx, President
LENDER:
THE FROST NATIONAL BANK
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Xxxxx X. Xxxxxx, Senior
Vice President
3
PROMISSORY NOTE
-------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$4,000,000.00 01-28-1997 03-31-1997 0501 500 6073 2211480 035
--------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
-------------------------------------------------------------------------------
Borrower: XXXXXX PRODUCTION SERVICES, INC. Lender: THE FROST NATIONAL BANK
(TIN: 00-0000000) X.X. XXX 0000
000 XX XXXX 000, XXXXX 000 XXX XXXXXXX, XX 00000
XXX XXXXXXX, XX 00000
===============================================================================
Principal Amount: $4,000,000.00 Initial Rate: 8.250% Date of Note: January 28, 1997
PROMISE TO PAY. XXXXXX PRODUCTION SERVICES, INC. ("Borrower") promises to pay
to THE FROST NATIONAL BANK ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Four Million & 00/100 Dollars
($4,000,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance or
maturity, whichever occurs first.
CHOICE OF USURY CEILING AND INTEREST RATE. The interest rate on this Note has
been implemented under the "Indicated Rate Ceiling" as referred to in Article
5069-1.04 (a)(1) V.T.C.S. The terms, including the rate, or index, formula, or
provision of law used to compute the rate on the Note, will be subject to
revision as to current and future balances, from time to time by notice from
Lender in compliance with Article 5069-1.04(l) V.T.C.S.
PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON MARCH 31, 1997. IN ADDITION,
BORROWER WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING
FEBRUARY 28, 1997, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE SAME DAY
OF EACH MONTH AFTER THAT. Interest on this Note is computed on a 365/360 simple
interest basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding, unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on a per diem basis of a year of 365 or 366 days, as the case may
be. Borrower will pay Lender at Lender's address shown above or at such other
place as Lender may designate in writing. Unless otherwise agreed or required
by applicable law, payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid collection costs and
late charges. Notwithstanding any other provision of this Note, Lender will not
charge interest on any undisbursed loan proceeds. No scheduled payment, whether
of principal or interest or both, will be due unless sufficient loan funds have
been disbursed by the scheduled payment date to justify the payment.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender's Prime Rate
(the "Index"). This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers. This rate may or
may not be the lowest rate available from Lender at any given time. Lender will
tell Borrower the current index rate upon Borrower's request. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each day. The index
currently is 8.250% per annum. The interest rate to be applied prior to
maturity to the unpaid principal balance of this Note will be at a rate equal
to the index, resulting in an initial rate of 8.250% per annum. NOTICE: Under
no circumstances will the interest rate on this Note be more than the maximum
rate allowed by applicable law. For purposes of this Note, the "maximum rate
allowed by applicable law" means the greater of (a) the maximum rate of interest
permitted under federal or other law applicable to the indebtedness evidenced
by this Note, or (b) the "Indicated Rate Ceiling" as referred to in Article
5069-1.04 (a)(1) V.T.C.S.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
POST MATURITY RATE. The Post Maturity Rate on this Note is the maximum rate
allowed by applicable law. Borrower will pay interest on all sums due after
final maturity, whether by acceleration or otherwise, at that rate, with the
exception of any amounts added to the principal balance of this Note based on
Lender's payment of insurance premiums, which will continue to accrue interest
at the pre-maturity rate.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any guarantor dies or any of the other events described in
this default section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the indebtedness is
impaired. (i) Lender in good xxxxx xxxxx itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire indebtedness,
including the unpaid principal balance on this Note, all accrued unpaid
interest, and all other amounts, costs and expenses for which Borrower is
responsible under this Note or any other agreement with Lender pertaining to
this loan, immediately due, without notice, and then Borrower will pay that
amount. Lender may hire an attorney to help collect this Note if Borrower does
not pay, and Borrower will pay Lender's reasonable attorneys' fees. Borrower
also will pay Lender all other amounts actually incurred by Lender as court
costs, lawful fees for filing, recording, or releasing to any public office any
instrument securing this loan; the reasonable cost actually expended for
repossessing, storing, preparing for sale, and selling any security; and fees
for noting a lien on or transferring a certificate of title to any motor
vehicle offered as security for this loan, or premiums or identifiable charges
received in connection with the sale of authorized insurance. This Note has
been delivered to Lender and accepted by Lender in the State of Texas. If there
is a lawsuit, and if the transaction evidenced by this Note occurred in Bexar
County, Borrower agrees upon Lender's request to submit to the jurisdiction of
the courts of Bexar County, the State of Texas. Subject to the provisions on
arbitration, this Note shall be governed by and construed in accordance with
the laws of the State of Texas and applicable Federal laws.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however
4
01-28-1997 PROMISSORY NOTE Page 2
Loan No 0501 (Continued)
================================================================================
all XXX and Xxxxx accounts, and all trust accounts for which the grant of a
security interest would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing on
this Note against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in
writing. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Lender's office shown above. Borrower
agrees to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender's internal
records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (a) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any guarantor
has with Lender, including any agreement made in connection with the signing of
this Note; (b) Borrower or any guarantor ceases doing business or is insolvent;
(c) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good xxxxx xxxxx itself
insecure under this Note or any other agreement between Lender and Borrower.
This revolving line of credit shall not be subject to Chapter 15, Article 5069
V.T.C.S. (the Texas Credit Code).
ARBITRATION. Lender and Borrower agree that all disputes, claims and
controversies between them, whether individual, joint, or class in nature,
arising from this Note or otherwise, including without limitation contract and
tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association, upon request of either party. No act to take or
dispose of any collateral securing this Note shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement. This
includes, without limitation, obtaining injunctive relief or a temporary
restraining order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to Article
9 of the Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise of any
right, concerning any collateral securing this Note, including any claim to
rescind, reform, or otherwise modify any agreement relating to the collateral
securing this Note, shall also be arbitrated, provided however that no
arbitrator shall have the right or the power to enjoin or restrain any act of
any party. Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this Note shall preclude any party
from seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, laches, and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The
Federal Arbitration Act shall apply to the construction, interpretation, and
enforcement of this arbitration provision.
DISHONORED CHECK CHARGE. In the event a check offered in full or partial
payment on this loan is returned unpaid, Lender may charge a fee for the purpose
of defraying the expense incident to handling such returned check, and Borrower
agrees to pay such fee. The fee shall not exceed the maximum amount permitted
under applicable law.
OTHER CREDITS AFFECTING AVAILABILITY. Any other credits made available to
Borrower by Lender, such as other loans or letters of credit, may be advanced
to Borrower and/or issued under this line of credit commitment, and any such
advances or issuances shall, in addition to the outstanding advances on this
Note, reduce the outstanding availability on the line of credit.
RENEWAL AND EXTENSION. This Note is given in renewal and extension and not in
novation of the following described indebtedness: THE PROMISSORY NOTE FROM
XXXXXX PRODUCTION SERVICES, INC. TO LENDER DATED NOVEMBER 28, 1996.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. In particular, this section means (among other
things) that Borrower does not agree or intend to pay, and Lender does not
agree or intend to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any amount in the
nature of interest or in the nature of a fee for this loan, which would in any
way or event (including demand, prepayment, or acceleration) cause Lender to
charge or collect more for this loan than the maximum Lender would be permitted
to charge or collect by federal law or the law of the State of Texas (as
applicable). Any such excess interest or unauthorized fee shall, instead of
anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded
to Borrower. The right to accelerate maturity of sums due under this Note does
not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Lender does not intend to charge
or collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of the loan evidenced
by this Note until payment in full so that the rate or amount of interest on
account of the loan evidenced hereby does not exceed the applicable usury
ceiling. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest, notice of dishonor, notice of intent
to accelerate the maturity of this Note, and notice of acceleration of the
maturity of this Note. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
XXXXXX PRODUCTION SERVICES, INC.
By:
--------------------------------------------------------
XXXXXXX X. XXXXXX, President and Chief Executive Officer
================================================================================
