SECOND AMENDMENT AND MODIFICATION AGREEMENT
TO LOAN AGREEMENT
This Second Amendment and Modification Agreement to Loan Agreement (the
"Agreement") is effective as of the 1st day of May, 1997 in Tulsa, Oklahoma, by
and between THE HOME-STAKE OIL & GAS COMPANY, an Oklahoma corporation
("Borrower"), whose mailing address, principal place of business and chief
executive offices are at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx, Xxxxxxxx, and
BOATMEN'S NATIONAL BANK OF OKLAHOMA, formerly known as BANK IV Oklahoma, N.A., a
national banking association (the "Bank"), whose address is 515 South Boulder
(or X.X. Xxx 0000, 00000), Xxxxx, Xxxxxxxx 00000.
R E C I T A L S
A. Borrower and the Bank previously made, executed and entered into that
certain Third Amended and Restated Loan Agreement dated as of the 29th day of
March, 1995 (the "Original Loan Agreement"), as amended by that First Amendment
and Modification Agreement to Loan Agreement dated May 1, 1996 (the "First
Modification") (the Original Loan Agreement, as amended by the First
Modification, is hereinafter referred to as the "Loan Agreement"), which
described and defined a financing arrangement wherein the Borrower was entitled
to borrow and the Bank agreed to lend (i) up to the principal amount of
$500,000.00, in the form of a revolving line of credit as evidenced by that
certain Promissory Note (the "Revolving Note") dated May 1, 1996 in the face
amount of $500,000.00 by the Borrower in favor of the Bank, and (ii) the
principal amount of $5,591,413.00 in the form of a term loan, as evidenced by
that certain Promissory Note (the "Term Note") dated May 1, 1996 in the face
amount of $5,591,413.00 by the Borrower in favor of the Bank. As of the date
hereof, there is outstanding the principal amount of $2,966,860.00 under the
Term Note and $0.00 in principal is outstanding under the Revolving Note plus
interest accrued in accordance with the terms thereof. (Except as specifically
defined herein, all capitalized terms used herein shall have the same meaning as
set forth in the Loan Agreement.)
B. Repayment of the Term Note and Revolving Note, along with any and all
other Indebtedness of Borrower to the Bank, is secured by a first priority
security interest in and to the Collateral as defined in the Loan Agreement and
the Security Instruments.
C. Borrower has requested that the Bank renew and extend the maturity of
the Revolving Note and the Term Note to May 1, 1998 and May 1, 1999,
respectively, and modify certain covenants as provided herein, and the Bank is
willing to do so subject to the terms and conditions set forth herein, and in
connection therewith, the parties desire to amend and modify the Loan Agreement
and other Loan Documents as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the conditions,
covenants, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereby mutually agree as follows:
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1. Renewal Revolving Note. Concurrently with the execution of this
Agreement, Borrower shall execute and deliver to the Bank that certain Extended,
Modified and Renewed Promissory Note (the "Renewal Revolving Note") of even date
herewith in the face amount of $500,000.00 due and payable at maturity on May 1,
1998, such Renewal Revolving Note to be in the form as shown in Exhibit "A"
attached hereto and made a part hereof, thereby evidencing Borrower's obligation
to repay advances under the Revolving Loan and thereby amending and modifying,
but not extinguishing the indebtedness of, the Revolving Note. All references in
the Loan Agreement and the Loan Documents to the term "Revolving Note" shall be
amended throughout to be deemed to refer to the Renewal Revolving Note and all
references in the Loan Agreement and the Loan Documents to the term "Revolving
Loan" shall be deemed amended throughout to refer to the loan evidenced by the
Renewal Revolving Note.
2. Renewal Term Note. Concurrently with the execution of this Agreement,
Borrower shall execute and deliver to the Bank that certain Extended, Modified
and Renewed Promissory Note (the "Renewal Term Note") of even date herewith in
the face amount of $2,966,860.00 due and payable at maturity on May 1, 1999,
such Renewal Term Note to be in the form as shown in Exhibit "B" attached hereto
and made a part hereof, thereby evidencing Borrower's obligation to repay the
Term Loan and thereby amending and modifying, but not extinguishing the
indebtedness of, the Term Note. All references in the Loan Agreement and the
Loan Documents to the term "Term Note" shall be amended throughout to be deemed
to refer to the Renewal Term Note and all references in the Loan Agreement and
the Loan Documents to the term "Term Loan" shall be deemed amended throughout to
refer to the loan evidenced by the Renewal Term Note. All references in the Loan
Agreement and the Loan Documents to the term "Notes" shall be amended throughout
to be deemed to refer to the Renewal Revolving Note and the Renewal Term Note.
3. Line of Credit Commitment. The last sentence of paragraph 2.3 of the
Loan Agreement is hereby amended in its entirety to read as follows:
This commitment shall expire, unless earlier terminated at 2:00 p.m.,
Tulsa, Oklahoma time on May 1, 1998.
4. Ratification of Mortgage and Security Interests. Borrower hereby
ratifies, confirms and reaffirms all security interests, liens and other
encumbrances created under the Loan Agreement, the Security Instruments, this
Agreement, and all other Loan Documents as security for repayment of Borrower's
Indebtedness (as that term is defined in Paragraph 3.6 of the Loan Agreement, as
amended and modified by this Agreement to contemplate the matters provided
therein or herein) and all other unreleased security agreements, mortgages and
deeds of trust in favor of the Bank, all of which shall continue in full force
and effect and with the same priority as security for repayment and satisfaction
of the Indebtedness and all extensions, modifications and renewals thereof,
including but not limited to the Renewal Term Note and the Renewal Revolving
Note.
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5. Modification, Ratification, Representations and Warranties. The terms
and provisions of the Loan Agreement and all other Loan Documents executed in
connection therewith shall be deemed amended, modified, and changed throughout
so as to reflect consistently the matters provided herein. As extended, amended,
modified, renewed or changed consistent herewith, the terms and provisions of
the Loan Agreement and all other Loan Documents shall remain in full force and
effect and Borrower hereby ratifies, reaffirms and reasserts, as of the date
hereof except as specifically amended herein, all covenants, representations,
warranties, agreements and statements contained therein. Further, and in
addition to the representations, warranties and covenants hereby ratified and
reaffirmed, Borrower, as applicable, certifies, covenants, represents, and
warrants to and with the Bank as follows:
a. Borrower is validly organized and existing and in good standing
under and by virtue of the laws of the State of Oklahoma and Borrower is
duly qualified to do business and is in good standing in every state and
jurisdiction in which it does or will do business.
b. The execution and delivery of this Agreement and all other
documents to be executed and delivered by Borrower to the Bank pursuant
hereto, and the due observance and performance by Borrower of its terms,
provisions and covenants are within Borrower's powers, have been duly
authorized, will not contravene or violate any law or term or provision of
Borrower's Certificate of Incorporation or By-laws or any corporate
resolution of its shareholders or directors and will not contravene,
violate or constitute a default under any contract, indenture, agreement or
undertaking to which Borrower is a party or by the terms of which Borrower
or any of its property or assets is bound.
c. Borrower's financial statements dated as of December 31, 1996,
copies of which have been furnished to the Bank, have been prepared in
conformity with GAAP, show all material liabilities, direct and contingent
(to the extent required by GAAP to be reflected therein), and fairly
present the financial condition of Borrower as of such date and the results
of its operations for the period then ended, and since such date there has
been no material adverse change in the business, financial condition or
operations of Borrower.
d. The Collateral is free of title defects, subject to no lien of any
kind except liens in favor of the Bank or otherwise permitted by the Loan
Agreement.
e. Except as set forth on Exhibit "C" attached hereto and made a part
hereof, there is no action, suit, investigation or proceeding threatened or
pending before any Tribunal against or affecting the Borrower or any
properties or rights of the Borrower or any claim thereof which if
adversely determined, would result in a liability of greater than
$100,000.00, or would otherwise result in any material adverse change in
the business or condition, financial or otherwise, of the Borrower.
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Further, the Borrower is not in default with respect to any judgment,
order, writ, injunction, decree, rule or regulation of any Tribunal, the
default of which would materially impair the ability of the Borrower to
carry on its business substantially as now conduct. Exhibit "G" to the Loan
Agreement is hereby amended consistent herewith.
6. Obligations Unaffected. Except as otherwise specified herein, the terms
and conditions hereof shall in no manner impair, limit, restrict or otherwise
affect the obligations of Borrower to the Bank pursuant to and as evidenced by
the Loan Documents. As a material inducement to the Bank to execute and deliver
this Agreement, Borrower hereby acknowledges that there are no claims or offsets
against, or defenses or counterclaims to, the terms or provisions of the
obligations created or evidenced by the Loan Documents, including but not
limited to the Renewal Term Note and the Renewal Revolving Note. In the event of
a conflict between the terms and conditions of this Agreement and the terms and
conditions of the other Loan Documents, the terms and conditions of this
Agreement shall control.
7. "Loan Documents" and "Loan Agreement". The term "Loan Documents" as used
in the Loan Agreement shall be interpreted to include this Agreement, the
Renewal Revolving Note and all of the other documents heretofore or hereafter
creating, evidencing, securing and/or relating to the Secured Obligations of
Borrower to the Bank as contemplated or referenced herein. The term "Loan
Agreement" as may be used in any of the Loan Documents shall be interpreted to
mean the Loan Agreement, together with and as modified by this Agreement. The
term "Secured Obligations" as used in the Loan Agreement or any other Loan
Documents shall be interpreted to include the Renewal Revolving Note and Renewal
Term Note in addition to all other obligations described therein.
8. Bank's legal Fees, Costs and Expenses. In consideration of and as a
condition precedent to the Bank's agreement to the execution, amendments and
modifications described herein, Borrower agrees to and shall pay promptly all
fees, including but not limited to the Bank's attorneys' fees, expenses and
charges with respect to and in connection with this Agreement and all other
documents contemplated hereby, including but not limited to, recording and
filing fees, and fees and expenses of counsel employed by the Bank in connection
with the documentation and closing of the transactions, amendments and
modifications contemplated hereby, and Borrower hereby agrees to pay promptly
all hereafter incurred fees, including but not limited to attorneys' fees,
expenses and charges of the Bank which are incidental to the enforcement,
defense, amendment, modification, extension, renewal or change of the Loan
Agreement, this Agreement or any other Loan Documents.
9. Separability. If any provision of this Agreement and the other Loan
Documents is held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the other provisions hereof, and this
Agreement and the other Loan Documents shall be construed and enforced as if
such provision had not been included herein.
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10. Binding Effect. Except as otherwise expressly provided herein, this
Agreement will remain in effect until all of Borrower's obligations to Bank
under this Agreement have been fully discharged. This Agreement shall be binding
upon Borrower and its successors and assigns, and shall inure to the benefit of
the Bank, its successors and assigns.
11. Headings. The headings used herein are for convenience and
administrative purposes only and do not constitute substantive matters to be
considered in construing the terms and provisions of this Agreement.
12. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Oklahoma.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the day and year first above written.
THE HOME-STAKE OIL & GAS COMPANY,
an Oklahoma corporation
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxxx, Executive Vice-President
"BORROWER"
BOATMEN'S NATIONAL BANK OF
OKLAHOMA, formerly known as
BANK IV Oklahoma, N.A., a
national banking
association
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
"BANK"
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EXHIBIT "A"
EXTENDED, MODIFIED AND RENEWED PROMISSORY NOTE
(Renewal Revolving Note)
$500,000.00 Tulsa, Oklahoma
May 1, 1997
1. FOR VALUE RECEIVED the undersigned, THE HOME-STAKE OIL & GAS COMPANY, an
Oklahoma corporation ("Maker"), promises to pay to the order of BOATMEN'S
NATIONAL BANK OF OKLAHOMA, formerly known as BANK IV OKLAHOMA, N.A., a national
banking association ("Payee"), the principal amount of this Note or such amount
thereof as shall be advanced and outstanding, together with interest on the
unpaid balance of such amount at the rate hereinafter set forth. This Note is
issued pursuant to that certain Third Amended and Restated Loan Agreement (the
"Original Loan Agreement") dated March 29, 1995 as amended by that certain First
Amendment and Modification Agreement to Loan Agreement (the "First Amendment")
dated May 1, 1996 and that certain Second Amendment and Modification Agreement
to Loan Agreement (the "Second Amendment") of even date herewith (the Original
Loan Agreement as amended by the First Amendment and the Second Amendment being
referred to as the "Loan Agreement") by and between Payee, as Lender, and Maker
as Borrower, and is subject to the provisions therein set forth. The obligations
represented by this Note are secured by the Loan Documents described in the Loan
Agreement.
2. Principal Amount. FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00).
3. Payments. All accrued interest on the unpaid balance of this Note is due
and payable on the first day of each calendar month, commencing June 1, 1997 and
continuing on the first day of each month thereafter until May 1, 1998 at which
time all principal and accrued and unpaid interest shall be due and payable to
Payee in full. Interest on this Note shall accrue from the date of the first
advance under this Note and any payment shall be applied first to the payment of
interest then due and second to the reduction of unpaid principal.
4. Interest Rate. Interest shall accrue on the outstanding principal
balance at the "Prime Rate" minus one percent (-1%) per annum. The term "Prime
Rate" means that rate of interest computed as an average of corporate loan rates
quoted by a certain number of the nation's largest banks, as announced from time
to time in the Wall Street Journal, Southwest Edition, as the "prime rate". The
Prime Rate shall be adjusted daily as announced, calculated on the basis of a
year of 360 days and a month of 30 days. Changes in the rate charged on this
Note are effective, without notice, on the same day as the effective change in
the Prime Rate as established from time to time. In any case where a payment of
principal and/or interest on this Note, or any part thereof, is due on a day on
which the Bank is not open for normal banking business, the undersigned shall be
entitled to delay such payments until the next succeeding business day, but
interest shall continue to accrue until the payment is in fact made.
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5. Interest Rate After Maturity. Matured and unpaid principal, whether by
acceleration or otherwise, shall bear interest at the Prime Rate plus five
percent (5%) per annum.
6. Prepayment Penalties. This Note may be prepaid, in whole or in part, at
any time, without premium or penalty.
7. Default. If the principal or any installment of interest due upon this
Note is not paid as and when the same becomes due and payable (whether by
demand, extension, acceleration or otherwise), or any party now or hereafter
liable (directly or indirectly) for payment of this Note makes an assignment for
benefit of creditors, has an order for relief entered under the United States
Bankruptcy Code, as amended, seeks the benefits of any other bankruptcy,
insolvency or reorganization law, or becomes insolvent, or any receiver, trustee
or like officer is appointed to take custody, possession or control of any
property of any such party, or upon the occurrence of any event of default under
the Loan Agreement or any other Loan Documents, the holder hereof may, after the
expiration of any grace or notice period as provided in the Loan Agreement,
without further notice and without presentment or demand for payment, declare
all of the unpaid balance hereof to be immediately due and payable. Such right
of acceleration is cumulative and in addition to any other right or rights of
acceleration under the Loan Agreement and any other writing now or hereafter
evidencing or securing payment of any of the indebtedness evidenced hereby.
8. Costs and Attorneys' Fees. If this Note is placed in the hands of an
attorney for collection, or suit is brought on same, or the same is collected
through Bankruptcy or other judicial proceeding, or the Payee is required to
defend the priority of the security, then the undersigned shall pay all of
Payee's reasonable costs and expenses including but not limited to a reasonable
amount as attorneys' fees.
9. Waivers. Maker and any party which may be or become liable for the
payment of any sums of money payable on this Note (including any surety,
endorser or guarantor) severally waive presentment and demand for payment,
protest, notice of protest and nonpayment, and notice of the intention to
accelerate, and agree that their liability on this Note shall not be affected by
any renewal or extension in the time of payment hereof, by any indulgences or by
any release or change in any security for the payment of this Note, regardless
of the number of such renewals, extensions, indulgences, releases or changes.
10. Right of Offset. Any indebtedness due from holder hereof to the
undersigned or any party hereto including, but without limitation, any deposits
or credit balances due from holder, is pledged to secure payment of this Note
and any other obligation to holder of the undersigned or any party hereto, and
may at any time while the whole or any part of such obligation remains unpaid,
either before or after maturity hereof, be appropriated, held or applied toward
the payment of this Note or any other obligation to holder of the undersigned or
any party hereto.
11. Governing Law. This Note has been executed and delivered in Tulsa
County, Oklahoma and shall be governed by and construed according to the laws of
the State of Oklahoma.
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12. Extension. This Note extends, modifies and renews (but does not
extinguish the indebtedness represented by) that certain Promissory Note dated
May 1, 1996 by the Maker in favor of the Payee in the face amount of
$500,000.00.
THE HOME-STAKE OIL & GAS COMPANY,
an Oklahoma corporation
By:___________________________________________
Xxxxx X. Xxxxxxxx, Executive Vice-President
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EXHIBIT "B"
EXTENDED, MODIFIED AND RENEWED PROMISSORY NOTE
(Renewal Term Note)
$2,966,860.00 Tulsa, Oklahoma
May 1, 1997
1. FOR VALUE RECEIVED the undersigned, THE HOME-STAKE OIL & GAS COMPANY, an
Oklahoma corporation ("Maker"), promises to pay to the order of BOATMEN'S
NATIONAL BANK OF OKLAHOMA, formerly known as BANK IV OKLAHOMA, N.A., a national
banking association ("Payee"), the principal amount of this Note, together with
interest on the unpaid balance of such amount at the rate hereinafter set forth.
This Note is issued pursuant to that certain Third Amended and Restated Loan
Agreement (the "Original Loan Agreement") dated March 29, 1995, as amended by
that certain First Amendment and Modification Agreement to Loan Agreement (the
"First Amendment") dated May 1, 1996 and that certain Second Amendment and
Modification Agreement to Loan Agreement (the "Second Amendment") of even date
herewith (the Original Loan Agreement as amended by the First Amendment and the
Second Amendment being referred to as the "Loan Agreement") by and between
Payee, as Lender, and Maker as Borrower, and is subject to the provisions
therein set forth. The obligations represented by this Note are secured by the
Loan Documents described in the Loan Agreement.
2. Principal Amount. TWO MILLION NINE HUNDRED SIXTY-SIX THOUSAND EIGHT
HUNDRED SIXTY AND NO/100 DOLLARS ($2,966,860.00).
3. Payments. All accrued interest on the unpaid balance of this Note
together with principal payments of ONE HUNDRED FOURTEEN THOUSAND ONE HUNDRED
TEN DOLLARS ($114,110.00) each are due and payable on the first day of each
calendar month, commencing June 1, 1997 and continuing on the first day of each
month thereafter until May 1, 1999, at which time all principal and accrued and
unpaid interest shall be due and payable to Payee in full. Interest on this Note
shall accrue from the date of this Note and any payment shall be applied first
to the payment of interest then due and second to the reduction of unpaid
principal.
4. Interest Rate. Interest shall accrue on the outstanding principal
balance at the "Prime Rate" minus one-half percent (-1/2%) per annum. The term
"Prime Rate" means that rate of interest computed as an average of corporate
loan rates quoted by a certain number of the nation's largest banks, as
announced from time to time in the Wall Street Journal, Southwest Edition as the
"prime rate". The Prime Rate shall be adjusted daily as announced, calculated on
the basis of a year of 360 days and a month of 30 days. Changes in the rate
charged on this Note are effective, without notice, on the same day as the
effective change in the Prime Rate as established from time to time. In any case
where a payment of principal and/or interest on this Note, or any part thereof,
is due on a day on which the Bank is not open for normal banking business, the
undersigned shall be entitled to delay such payments until the next succeeding
business day, but interest shall continue to accrue until the payment is in fact
made.
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5. Interest Rate After Maturity. Matured and unpaid principal, whether by
acceleration or otherwise, shall bear interest at the Prime Rate plus five
percent (5%) per annum.
6. Prepayment Penalties. This Note may be prepaid, in whole or in part, at
any time, without premium or penalty.
7. Default. If the principal or any installment of interest due upon this
Note is not paid as and when the same becomes due and payable (whether by
demand, extension, acceleration or otherwise), or any party now or hereafter
liable (directly or indirectly) for payment of this Note makes an assignment for
benefit of creditors, has an order for relief entered under the United States
Bankruptcy Code, as amended, seeks the benefits of any other bankruptcy,
insolvency or reorganization law, or becomes insolvent, or any receiver, trustee
or like officer is appointed to take custody, possession or control of any
property of any such party, or upon the occurrence of any event of default under
the Loan Agreement or any other Loan Documents, the holder hereof may, after the
expiration of any grace or notice period as provided in the Loan Agreement,
without further notice and without presentment or demand for payment, declare
all of the unpaid balance hereof to be immediately due and payable. Such right
of acceleration is cumulative and in addition to any other right or rights of
acceleration under the Loan Agreement and any other writing now or hereafter
evidencing or securing payment of any of the indebtedness evidenced hereby.
8. Costs and Attorneys' Fees. If this Note is placed in the hands of an
attorney for collection, or suit is brought on same, or the same is collected
through Bankruptcy or other judicial proceeding, or the Payee is required to
defend the priority of the security, then the undersigned shall pay all of
Payee's reasonable costs and expenses including but not limited to a reasonable
amount as attorneys' fees.
9. Waivers. Maker and any party which may be or become liable for the
payment of any sums of money payable on this Note (including any surety,
endorser or guarantor) severally waive presentment and demand for payment,
protest, notice of protest and nonpayment, and notice of the intention to
accelerate, and agree that their liability on this note shall not be affected by
any renewal or extension in the time of payment hereof, by any indulgences or by
any release or change in any security for the payment of this note, regardless
of the number of such renewals, extensions, indulgences, releases or changes.
10. Right of Offset. Any indebtedness due from holder hereof to the
undersigned or any party hereto including, but without limitation, any deposits
or credit balances due from holder, is pledged to secure payment of this Note
and any other obligation to holder of the undersigned or any party hereto, and
may at any time while the whole or any part of such obligation remains unpaid,
either before or after maturity hereof, be appropriated, held or applied toward
the payment of this Note or any other obligation to holder of the undersigned or
any party hereto.
11. Governing Law. This Note has been executed and delivered in Tulsa
County, Oklahoma and shall be governed by and construed according to the laws of
the State of Oklahoma.
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12. Extension. This Note extends, modifies and renews (but does not
extinguish the indebtedness represented) by that certain Promissory Note dated
May 1, 1996 by the Maker in the favor of the Payment in the face amount of
$2,966,860.00.
THE HOME-STAKE OIL & GAS COMPANY,
an Oklahoma corporation
By:___________________________________________
Xxxxx X. Xxxxxxxx, Executive Vice-President
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