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EXHIBIT (b)(2)
SECOND AMENDMENT TO
LOAN AGREEMENT DATED JANUARY 15, 1998
BY AND AMONG
SAN XXXX PARTNERS, L.L.C.
AND
BANK ONE, TEXAS, N.A.
This Second Amendment to Loan Agreement dated January 15,
1998, is entered into as of October 9, 1998 (this "Second Amendment") by and
among SAN XXXX PARTNERS, L.L.C. ("Borrower"), and BANK ONE, TEXAS, N.A., a
national banking association (the "Bank").
W I T N E S E T H:
Borrower and Bank entered into a Loan Agreement dated January
15, 1998 (the "Loan Agreement") as amended by the First Amendment dated June 3,
1998.
Borrower has requested that Bank increase the face amount of
the Note, increase the amount of the Commitment, and make certain other
modifications to the Loan Agreement, and Bank is willing to do so subject to and
conditioned upon the provisions this Second Amendment.
NOW, THEREFORE, in consideration of the promises herein
contained, and each intending to be legally bound hereby, the parties agree as
follows:
I. Amendments to Loan Agreement.
Article I of the Loan Agreement is hereby amended by adding the
following definitions:
"First Amendment" means the First Amendment to the Loan Agreement
dated January 3, 1998.
"Second Amendment" means the Second Amendment to the Loan Agreement
dated October 9, 1998.
Article I of the Loan Agreement is hereby amended to revise the
definition of "Commitment" by replacing the amount "25,000,000.00" that appears
therein with the amount "$26,500,000.00."
Article I of the Loan Agreement is further amended to revise the
definition of "Note" in its entirety to read as follows:
"Note" means that certain amended and restated advancing term note in
the original face amount of $32,000,000.00, made by Borrower payable
to the order of Bank, in the form attached as Exhibit "A" to the
Second Amendment, together with all deferrals, renewals, extensions,
amendments, modifications or
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rearrangements thereof, which promissory note shall evidence the
advances to Borrower by Bank pursuant to Section 2.01 hereof.
Article I of the Loan Agreement is further amended to revise the
definition of "Permanent Brokerage Account" by replacing the account number
"000-000000-000" that appears therein with the account number "000-000000-000."
Section 2.08 of the Loan Agreement is hereby amended by replacing the
phrase "$25,000,000.00 as of January 15, 1998," which appears at the end of the
first sentence thereof, with the phrase "$26,500,000.00 as of October 9, 1998."
Section 2.11 of the Loan Agreement is hereby amended by adding the
following text at the end of such Section:
At such time as the Commitment is increased pursuant to the Second
Amendment, Borrower shall pay to Bank an additional Facility Fee
equal to five tenths of one percent (.5%) of the difference between
the amount of such increased Commitment minus $25,000,000.00.
Section 3.10 of the Loan Agreement is hereby amended in its entirety
to read as follows:
3.10 Cash Collateral Account. Borrower shall have established with
Banc One Securities Corporation as of the closing of the Second
Amendment Account No. 000-000000-000, into which the deposits
required by Section 5.20 shall be made.
Section 5.20(b) of the Loan Agreement is hereby amended by replacing
the date "September 1, 1998," which appears in the first sentence thereof with
the date "December 1, 1998," and by replacing the date "November 30, 1988,"
which also appears in the first sentence thereof, with the date "December 31,
1998".
Section 5.29 of the Loan Agreement is hereby amended in its entirety
to read as follows:
5.29 Deposit of Trust Units in Brokerage Account and Delivery of
Trust Unit Certificates to Bank. Borrower shall cause all Trust Units
to be either: (a) acquired in the name of Banc One Securities
Corporation and held in the Permanent Brokerage Account, provided
that with respect to any Trust Units acquired for the account of
Borrower by Xxxxxxxx Corporation, such Trust Units may be held in the
name of Xxxxxxxx Corporation in the Pass Through Brokerage Account
for not more than seven days from the date of acquisition until
transferred to the Permanent Brokerage Account, or (b) acquired in
the name of Borrower pursuant to a certificate or certificates issued
by the Trust evidencing Borrower's ownership of a designated number
of Trust Units (herein called, whether one or more, a "Unit
Certificate"), in which case each such Unit Certificate shall be
delivered by Borrower to Bank within two (2) Business Days
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after Borrower's acquisition of the Trust Units evidenced by such
Unit Certificate (or, if later, within two (2) Business Days after
the Unit Certificate evidencing such Trust Unit ownership is
delivered to Borrower or its representative), together with a blank
Trust Unit power executed by Borrower evidencing the transfer of
Borrower's interest in the Trust Units represented by such Unit
Certificate.
Exhibit "A" to the Loan Agreement is hereby amended by replacing such
exhibit with Exhibit "A" to the Second Amendment.
Exhibit "C" to the Loan Agreement is hereby amended by modifying the
description of the "Pledge Agreement" described in Item 2 thereof to read as
follows:
2. PLEDGE AGREEMENT granting Bank a first priority security interest
in: (a) the Pass Through Brokerage Account and the Permanent
Brokerage Account in which all of Borrower's Trust Units that are not
acquired in Borrower's own name pursuant to a Unit Certificate
evidencing Borrower's ownership thereof shall be maintained, and (b)
all Trust Units acquired in Borrower's own name pursuant to a Unit
Certificate designating Borrower as the owner of such Trust Units.
II. Conditions to Second Amendment. This Second Amendment shall not become
effective until the following conditions have been satisfied:
A. Bank shall have received the Note (in the form attached as Exhibit
A to the Second Amendment), multiple counterparts of the Second
Amendment, as requested by Bank, and a Certificate of Compliance (in
the form attached as Exhibit B to the Second Amendment), all duly
executed on behalf of Borrower.
B. Bank shall have received amendments to the Pledge of Brokerage
Account and to the U.C.C.-1 Financing Statement, each previously
executed and delivered by Borrower to Bank pursuant to Section 3.16
of the Loan Agreement, such amendments to be in form and substance
satisfactory to Bank in its discretion, amending the number of the
Permanent Brokerage Account to designate the proper account number,
and also adding to the Collateral covered by such Pledge and
Financing Statement all Trust Units held in Borrower's name pursuant
to one or more Unit Certificates, together with blank Trust Unit
powers in form satisfactory to Bank in its discretion, all duly
executed on behalf of Borrower.
C. Bank shall have received payment of the fee required by Section
2.11 of the Loan Agreement, as amended by the Second Amendment.
D. The requirements of Article III of the Loan Agreement shall be
satisfied to the extent that they applicable with respect to any
Trust Units that are to be added to the Borrowing
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Base Property and any additional advances that are to be made
pursuant to the Second Amendment, including Sections 3.03, 3.04,
3.06, 3.09, 3.11, and 3.13 through 3.17.
III. Extent of Amendments. This Second Amendment shall not be deemed to be an
amendment by Bank of any covenant, condition or obligation on the part of the
Borrower under the Loan Agreement, as amended hereby, except as expressly set
forth herein. In addition, this Second Amendment shall in no respect evidence
any commitment by the Bank to grant any future amendments of any covenant,
condition or obligation on the part of the Borrower under the Loan Agreement, as
amended hereby. Any further amendments, waivers or consents must be specifically
agreed to in writing in accordance with Section 8.12 of the Loan Agreement.
IV. Reaffirmation of Representations and Warranties. To induce the Bank to enter
into this Second Amendment, the Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Article IV of the Loan
Agreement and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:
A. The execution and delivery of this Second Amendment and the
performance of Borrower of its obligations under this Second
Amendment are within Borrower's power, have been duly authorized by
all necessary corporate action, have received all necessary
governmental approval (if any shall be required), and do not and will
not contravene or conflict with any provision of law or of the
charter or by-laws of the Borrower or of any agreement binding upon
Borrower.
B. This Second Amendment represents the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with its terms subject as to enforcement only to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally.
C. Since the date of the Loan Agreement, no change, event or state of
affairs has occurred and is continuing which would constitute an
event of default as described in Section 7.01 of the Loan Agreement.
V. Defined Terms. Terms used herein that are defined in the Loan Agreement shall
have the same meanings herein, unless the context otherwise requires.
VI. Reaffirmation of Loan Agreement. This Second Amendment shall be deemed to be
an amendment to the Loan Agreement, and the Loan Agreement, as amended hereby,
is hereby ratified, adopted and confirmed in each and every respect.
VII. Governing Law. THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. This Second Amendment has been entered into in Xxxxxx
County, Texas, and it shall be performable for all purposes in Xxxxxx County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes
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between the Borrower and the Bank, whether in law or equity, including,
but not limited to, any and all disputes arising out of or relating to this
Second Amendment or any other Loan Documents; and venue in any such dispute
whether in federal or state court shall be laid in Xxxxxx County, Texas.
VIII. Severability. Whenever possible each provision of this Second Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Second Amendment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Second Amendment.
IX. Execution in Counterparts. This Second Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts on
different dates, and each such counterpart shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
agreement.
X. Section Captions. Section captions used in this Second Amendment are for
convenience of reference only, and shall not affect the construction of this
Second Amendment.
XI. Successors and Assigns. This Second Amendment shall be binding upon the
Borrower, the Bank and its respective successors and assigns, and shall inure to
the benefit of the Borrower, the Bank and the respective successors and assigns
of the Bank.
XII. Non-Application of Chapter 346 of Texas Finance Code. The provisions of
Chapter 346 of the Texas Finance Code are specifically declared by the parties
hereto not to be applicable to the Loan Agreement, this Second Amendment or any
of the other Loan Documents or to the transactions contemplated hereby.
XIII. Notice. THE LOAN AGREEMENT, AS HEREBY AMENDED, EMBODIES THE ENTIRE
AGREEMENT BETWEEN THE BORROWER AND THE BANK AND SUPERSEDES ALL PRIOR PROPOSALS,
AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER HEREOF. THE
BORROWER CERTIFIES THAT IT IS RELYING ON NO REPRESENTATION, WARRANTY, COVENANT
OR AGREEMENT EXCEPT FOR THOSE SET FORTH IN THE LOAN AGREEMENT, AS HEREBY
AMENDED, AND THE OTHER DOCUMENTS PREVIOUSLY EXECUTED IN CONNECTION THEREWITH.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the day and year first above written.
BORROWER:
SAN XXXX PARTNERS, L.L.C
By: X'Xxxxxxxx Oil & Gas Company, Inc.
Its Sole Manager
By: /s/ C.N.X'Xxxxxxxx
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C.N. X'Xxxxxxxx
President
BANK:
BANK ONE, TEXAS, N.A.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Vice President
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