Change In Terms Agreement
Borrower: Gulfwest Energy, Inc. 000 X. Xxx Xxxxxxx Xxxxxxx E., Suite 300
Houston, IX 77060 (TIN: 00-0000000) lender: Southwest Bank of Texas X.X. Xxxx
Tower P.O. Box 27459 5 Post Oak Park/4400 Post Oak Parkway Houston, TX
77227.7459 (000) 000-0000 Principal Amount: $1,000,000.00 Initial Rate: 5.500%
Date of Agreement: April 29, 2003 DESCRIPTION OF EXISTING INDEBTEDNESS. Original
Promissory Note (the "Note") dated April 30, 2002 in the original principal sum
of $1,000,000.00 executed by Borrower, payable to Southwest Bank of Texas N.A.,
as modified as applicable. .. DESCRIPTION OF CHANGE IN TERMS. The Note is being
modified in accordance with the terms and provisions stated herein.PROMISE TO
PAY. Gulfwest Energy, Inc. (“Borrower”) promises to pay to Southwest
Bank of Texas N.A. (“lender”), or order, in lawful money of the United
States of America, the principal amount of One Million & 00/100 Dollars
($1,000,000.00) 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 firs’t. The interest rate will not increase
above 8.000%.PAYMENT. Borrower will pay this loan on demand. Payment in full is
due immediately upon lender's demand. If no demand is made, Borrower will pay
this loan in one payment of all outstanding principal plus all accrued unpaid
interest on July 28, 2003. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of each payment date, beginning
May 28, 2003, with all subsequent interest payments to be due on the same day of
each month after that. Interest on this Agreement is computed on a 365/360
simple interest basis; that is, by applying the ratio of the annual interest
rate over a year 01: 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 wri1:ing. I~otwithstanding any other
provision of this Agreement, 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 Agreement is subject to change from time to time based on changes in an
index which is the Southwest Bank of Texas N.A. prime rate (the
“Index”). Southwest Bank of Texas N.A. prime rate of interest is the
rate of interest established by the Bank from time to time as its prime rate.
The rate is set by the Bank as a general reference rate of interest, taking into
account such factors as the Bank may deem appropriate, it being understood that
many of the Bank’s consumer and other loans are priced in retation to such
rate, that it is not necessarily the lowest or best rate actually charged any
customer and that the Bank may make various consumer or other loans at rates of
interest having no relationship to such rate. lender will tell Borrower the
current Index rate upon Borrower’s request. The interest rate change will
not occur more often than each day. Borrower understands that lender may make
loans based on other rates as well. The Index currently is 4.250% per annum. The
interest rate to be applied prior to maturity to the unpaid principal balance of
the Note will be at a rate equal to the Index, adjusted if necessary for any
minimum and maximum rate limitations described below, resulting in an initial
rate of 5.500% per annum. Notwithstanding the foregoing.. the variable interest
rate or rates provided for in the Note will be subject to the following minimum
and maximum rates. NOTICE: Under no circumstances will the interest rate on the
Note be less than 5.500% per annum or more than the lesser of 8.000% per annum
or the maximum rate allowed by applicable law. For purposes of this Agreement,
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 Agreement, or (B) the “Weekly
Ceiling” as referred to in Sections 303.002 and 303.003 of the Texas
Finance Code. PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Any partial payment shall be in an
amount equal to one or more full installments. Prepayment in full shall consist
of payment of the remaining unpaid principal balance together with all accrued
and unpaid interest and all other amounts, costs and expenses for which Borrower
is responsible under this Agreement or any other agreement with lender
pertaining to this loan, and in no event will Borrower ever be required to pay
any unearned interest. 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, early payments will reduce the principal
balance due. Borrower agrees not to send lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
lender may accept it without losing any of lender's rights under this Agreement,
and Borrower will remain obligated to pay any further amount owed to lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to:
Xxxxxxxxx Xxxx xx Xxxxx X.X., Xxxx Xxxxx, X,X. Xxx 00000,0 Post Oak Xxxx/0000
Xxxx Xxx Xxxxxxx, Xxxxxxx, XX00000-0000. INTEREST AFTER DEFAULT. Upon default,
including failure to pay upon final maturity, the total sum due under this
Agreement will bear interest from the date of acceleration or maturity at the
variable interest rate on this Agreement. The interest rate will not exceed the
maximum rate permitted by applicable law. t DEFAULT.. Each of the following
shall constitute an Event of Default under this Agreement: I Payment Default.
Borrower fails to make any payment when due under the Indebtedness. Other
Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the-
Related Documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between lender and Borrower.
Default in Favor of Third Parties. 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 perform
Borrower’s obligations under this Agreement or any of the Related
Documents.False Statements. Any warranty, representation or statement made or
furnished to lender by Borrower or on Borrower’s behalf under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter. Insolvency. The dissolution or termination of
Borrower's existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower’s property, qny
assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or
against Xxxxxxxx.xx cure the default and ~hereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.lENDERS RIGHTS. Upon default, lender may declare the entire
indebtedness, including the unpaid principal balance on this Agreement, all
accrued unpaid interest, and all other amounts, costs and expenses for which
Borrower is responsible under this Agreement or any other agreement with lender
pertaining to this loan, immediately due, without notice, and then Borrower will
pay that amount. ATTORNEYS FEES; EXPENSES. lender may hire an attorney to help
collect this ,l\greement if Borrower does not pay, and Borrower will pay
lender’s reasonable attorneys’ fees, Borrower also will pay lender all
other amounts lender actually incurs as court costs, lawful fees for filing,
recording, releasing to any public office any instrument securing this
Agreement; 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 Agreement, or premiums or identifiable charges received in connection with
the sale of authorized insurance. JURY WAIVER. lender and Borrower hereby waive
the right to any jury trial in any action, proceeding, or counterclaim brought
by either lender or Borrower against the other. GOVERNING lAW. This Agreement
will be governed by, construed and enforced in accordance with federal law and
the laws of the State of Texas. This Agreement has been accepted by lender in
the State of Texas. CHOICE OF VENUE. If there is a lawsuit, and if the
transaction evidenced by this Agreement occurred in Xxxxxx County, Borrower
agrees upon lender's request to submit to the jurisdiction of the courts of
Xxxxxx County, State of Texas. RIGHT OF SETOFF. To the extent permitted by
applicable law, Lender reserves a right of setoff in all Borrower’s
accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any XXX or Xxxxx
accounts, or any trust accounts for which setoff would be prohibited by law.
Borrower autnorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the debt against any and all such accounts.LINE OF
CREDIT. This Agreement evidences a revolving line of credit. Advances under this
Agreement may be requested orally by Borrower or as provided in this paragraph.
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. The
following person currently is authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at
Lender’s address shown above, written notice of revocation of his or her
authority: Xxxxxx X. Xxxxxxx, President of Gulfwest Energy, Inc. 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 Agreement at
any time may be evidenced by endorsements on this Agreement or by Lender’s
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Agreement if: (A) Borrower or any
guarantor is in default under the terms of this J~greement or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Agreement; (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 Agreement or any other loan with Lender; (D) Borrower has applied funds
provided pursuant to this Agreement for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure. This revolving
line of credit shall not be subject to Ch. 346 of the Texas Finance Code.
ARBITRATION. Borrower and Lender agree that all disputes, claims and
contro"ersies between them whether individual, joint, or class in nature,
arising from this Agreement or otherwise, including without limitation contract
and tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association in effect at the time the claim is filed, upon request
of either party. No act to take or dispose of any Collateral shall constitute a
waiver of this arbitration Ilgreernent 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, including any claim to rescind, reform, or
otherwise modify any agreement relating to the Collateral, 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 Agreement 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
cons1:ruction, interpretation, and enforcement of this arbitration provision.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender’s right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.FACSIMILE PROVISIONS. All parties agree that any execute,j facsimile
(faxed) copy of this document shall be deemed to be of the same force and effect
as the original, manually executed documents. NOTICE OF FINAL AGREEMENT. THIS
DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THIS LOAN CONSTITUTE A WRITTEN LOAN
AGREEMENT WHICH 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 RELATING TO THIS LOAN. DOCUMENT IMAGING. Borrower (or Guarantor or
Grantor, as applicable) understarlds and agrees that (i) Lender's (Bank's)
document retention policy involves the imaging of executed loan documents and
the destruction of the paper originals, and (ii) Borrower (or Guarantor or
Grantor, as I applicable) waives any right that it may have to claim that the
imaged copies of the loan documents are not originals. ELECTRONIC DELIVERY OF
DOCUMENTS. (a) The provisions of this Section shall be applicable in the event
that Borrower d~livers any (i) financial statements of eorrower or any other
Person (“Financial Statements”), (ii) no default or compliance
certificates (“No Default Certificates”) or (iii) borrowing base
certificates (“Borrowing Base Certificatf)$", and together with the
Financial Statements, the No Default Certificates and any other documents or
information regarding Borrower or any other Person delivered to Bank pursuant to
this Agreement, collectively, the “Financial Information”) in
electronic form (by “email”). affect the rest of the Agreement.
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, 9r 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 Agreement 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 Agreement 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 Agreement without losing
them. Borrower and any other person who signs, guarantees or endorses this
Agreement, to the extent allowed by law, waive presentment, demand for payment,
notice of dishonor, notice of intent to accelerate the maturity of this
Agreement, and notice of acceleration of the maturity of this Agreement. Upon
any change in the terms of this Agreement, and unless otherwise expressly stated
in writing, no party who signs this Agreement, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that lender may renew or extend (repeatedly ~nd 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 in~erest in the collateral
without the consent of or notice to anyone. All such parties also agree that
lender may modify this loan without the con$ent of or notice to anyone other
than the party with whom the modification is made. The obligations under this
Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ
AND UNDERSTOOD All THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGRI,ES TO THE TERMS OF THE
AGREEMENT.References in the shaded area are for Lender’s use only and do
not limit the appli(:ability of this document to any particular loan or item.
has been omitted du~ to text length limitations. Borrower: Gulfwest Energy, Inc.
(TIN: 00-0000000) Lender: Southwest Bank of Texas N.A. 000 X. Xxx Xxxxxxx
Xxxxxxx E.. Suite 000 Xxxx Xxxxx Xxxxxxx, XX 00000 X.x. Xxx 00000 i 5 Post Oak
Xxxx/0000 Xxxx Xxx Xxxxxxx Xxxxxxx, XX 00000-0000 (000) 000-0000 THE WRITTEN
LOAN AGREEMENT REPRE~iENTS 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. As used in this Notice, the following terms have the following
meanings: Loan. The term "Loan" means the following described loan: a
non-precomputed Variable Rate Nondisclosable Revolving Line of Credit Loan to a
Corporation for $1,000,000.00 due on July 28, 2003. The reference rate
(Southwest Bank of Texas N.A. prime rate, with an interest rate floor of 5.500%,
and with an interest rate ceiling of 8.000%, currently 4.250%), resulting in an
initial rate of 5.500. This is an unsecured renewal xxxx.Xxxx Agreement. The
term “Loan Agreement” means one or more promises, promissory notes,
agreements, undertakings, security agreements, deeds of trust or other
documents, or commitments, or any combination of those actions or documents,
relating to the Loan, including without limitation the following: LOAN DOCUMENTS
Business Loan Agreement Change In Terms Agreement TX Commercial Guaranty: J.
Xxxxxx Xxxxxxxx TX Commercial Guaranty: Xxxxxxxx X. Xxxxx TX Commercial
Guaranty: Xxxxxx X. Xxxxxxx Disbursement Request and Authorization Notice of
Final Agreement Parties. The term "Parties" means Southwest Bank of Texas N.A.
and any and all entities or individuals who are obligated to repay the loan or
have pledged property as security for the Loan, including without limitation the
following: Borrower: Gulfwest Energy, Inc. Guarantor 1: J. Xxxxxx Xxxxxxxx
Guarantor 2: Xxxxxxxx X. Xxxxx Guarantor 3: Xxxxxx X. Xxxxxxx This Notice of
Final Agreement is given by Southwest Bank of Texas N.A. pursuant to Section
26.02 of the Texas Business and Commerce Code. Each Party who signs below, other
than Southwest Barlk of Texas N.A., acknowledges, represents, and warrants to
Southwest Bank of Texas N.A. that it has received, read and understood this
Notice of Final Agreement. This Notice is dated April 29, 2003. BORROWER: G
LENDER:
