FIRST AMENDMENT
TO
SECURITY INTEREST AGREEMENT
Security interest in Securities
DATED this 18th day of March 1998
BETWEEN:
(1) LONDON AUSTRALIAN & GENERAL PROPERTY COMPANY LIMITED, a company
incorporated in England whose registered office is a ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("Lender"), as assignee of THAMESEDGE
LIMITED, a company incorporated in England whose registered office is
a ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("Original Lender")
AND
(2) HONDO OIL & GAS COMPANY, a Delaware corporation whose principal
office is at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ (the "Debtor")
AND
(3) FOLIO TRUST COMPANY LIMITED, a company incorporated in Jersey whose
registered office is at Westaway ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Folio Trust")
AND
(4) FOLIO NOMINEES LIMITED, a company incorporated in the British Virgin
Islands whose administrative office is at Westaway ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Folio Nominees")
WHEREAS
(A) The Debtor has entered into a certain Security Interest
Agreement, dated May 13, 1997 (the "Original Security Interest Agreement"), in
favor of the Original Lender, in which the Debtor (among other things) granted a
lien and security interest in certain Collateral to the Original Lender;
(B) London Australian & General Property Company Limited has received
an assignment from Thamesedge Limited ("Thamesedge") of all of the Obligations
and all of Thamesedge's rights and duties under the Original Security Interest
Agreement;
(C) The Lender has agreed to extend additional credit to the Debtor
and to extend the maturity dates of the Obligations;
(D) As a condition thereto, the Lender has requested, and the Debtor
has agreed, to enter into this Amendment;
(E) Capitalized terms used and not otherwise defined or amended in
this Amendment shall have the meanings respectively assigned to them in (or
determined in accordance with) the Original Security Interest Agreement.
In consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, IT IS HEREBY AGREED AS FOLLOWS:
1. Amendment to Original Security Interest Agreement. The
Original Security Interest Agreement is hereby amended as of the date first
written above as follows:
(A) All references in the Original Security Interest
Agreement or in this Amendment to "this Agreement" or "this Security Interest
Agreement", or similar references, shall mean the Original Security Interest
Agreement, as amended by this Amendment, and as the same may be further amended,
restated or otherwise modified or supplemented from time to time in accordance
with the terms thereof. This Amendment may be referred to in this Agreement as
the "First Security Interest Agreement Amendment".
(B) In Section 1 of the Original Security Interest
Agreement, clauses (i), (ii) and (iii) are amended to read:
"(i) all monies and liabilities payable
under the credit and loan facilities
(as same has been and may be
supplemented, modified, amended or
restated from time to time)
described in the First Schedule;
(ii) any other indebtedness or
liabilities whatsoever of the Debtor
now existing or hereafter incurred
on any account or accounts in favor
of the Lender; and
(iii) all other costs, charges, legal or
other expenses (incurred by the
Lender in respect of the facilities
detailed in the First Schedule) on a
full and unqualified indemnity
basis;
(collectively the "Obligations"):"
(C) In Section 8, the following new paragraph is added at
the end thereof without the deletion or modification of any other material:
"With respect to any Collateral and subject to any
contrary requirement of applicable law, (x) the Lender
shall collect the cash proceeds received from any sale or
other
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liquidation or disposition or from any other source and
(y) after deducting all costs and expenses incurred by the
Lender and any person designated by the Lender to take any
of the actions in connection with such collection and sale
or other liquidation or disposition (including attorneys'
disbursements, expenses and fees), the Lender in its sole
and absolute discretion may retain the same as additional
or substitute Collateral or may apply the same (first to
interest then to principal) to the Obligations described
in and in direct order set forth on the First Schedule. In
the event any funds remain after satisfaction in full of
all of the Obligations, then the remainder shall be
returned to the Debtor, subject, however, to any other
rights or interests the Lender may have therein under any
other instrument, agreement or document or applicable law.
If the amount of all proceeds received with respect to and
in liquidation of the Collateral that shall be applied to
payment of the Obligations shall be insufficient to pay
and satisfy all of the Obligations in full, the Debtor
acknowledges and agrees that the Debtor shall remain and
be jointly and severally liable for any deficiency.
(D) The First Schedule is amended to read as follows:
FIRST SCHEDULE
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The Obligations
1. Amended and Restated Note dated as of 18th
December, 1997 in the principal amount of
US$7,500,000 (seven million five hundred
thousand United States dollars) which amends,
restates and replaces that certain Note dated
31st October, 1994, in the principal amount of
US$5,000,000.00 (five million United States
dollars), as assigned to Thamesedge and, in
turn, to London Australian & General Property
Company ("LAGP"), as same may be supplemented,
modified, amended or restated from time to time
(the "Facility Note");
2. Amended and Restated Revolving Credit Agreement
dated 2nd July, 1997 between Debtor and Lender,
as same has been, and as same may be,
supplemented, modified, amended or restated
from time to time, including any Promissory
Note or Notes issued thereunder, as same has
been, and as same may be, supplemented,
modified, amended or restated from time to time
(the "Revolving Credit Note");
3. Amended and Restated Note dated as of 18th
December, 1997 in the principal amount of
US$4,500,000 (four million five hundred
thousand United States dollars) which amends,
restates and replaces that certain Note dated
30th April, 1993, in the principal amount of
US$3,000,000.00 (three million United States
dollars) from Via Verde Development Company
("Via Verde") to Lonrho, as assigned to
Thamesedge and, in turn, to LAGP, as same may
be supplemented, modified, amended or restated
from time to time, including to
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add unpaid interest to principal (the "Via
Verde Note"), secured by a deed of trust
recorded as Instrument No. 93-840817 in the
Real Property Records of Los Angeles County,
California as same has been, and as same may
be, supplemented, modified, amended or restated
from time to time (the "Via Verde Mortgage"),
and guaranteed by Debtor in a Guaranty dated
30th April, 1993 as same has been, and as same
may be, supplemented, modified, amended or
restated from time to time (the "Hondo
Guaranty");
4. Amended and Restated Note dated as of 18th
December, 1997 in the principal amount of
US$5,500,000 (five million five hundred
thousand United States dollars) which amends,
restates and replaces that certain Note dated
25th June, 1993, in the principal amount of
US$4,000,000.00 (four million United States
dollars) from Hondo to Lonrho, as assigned to
Thamesedge and, in turn, to LAGP, as same may
be supplemented, modified, amended or restated
from time to time, including to add unpaid
interest to principal (the "Valley Gateway
Note"), secured by a deed of trust dated 30th
August, 1993, granted by Borrower and Newhall
Refining Co., Inc. ("Newhall") recorded as
Instrument No. ▇▇-▇▇▇▇▇▇▇ in the Real Property
Records of Los Angeles, California, as same has
been, and as same may be, supplemented,
modified, amended or restated from time to time
(the "Valley Gateway Mortgage");
5. Consolidated, Amended and Restated Note dated
18th December, 1997 in the principal amount of
US$40,000,000 (forty million United States
dollars) which consolidates, amends, restates
and replaces that certain Notes dated 1st
September, 1991, in the original principal
amount of US$10,000,000.00 (ten million United
States dollars); dated 1st November, 1991 in
the original principal amount of
US$9,000,000.00 (nine million United States
dollars); and dated 20th December, 1991, in the
original principal amount of US$13,000,000.00
(thirteen million United States dollars) from
Debtor to Lonrho Plc ("Lonrho"), as assigned to
Thamesedge and, in turn, to LAGP, as each has
been, and as each may be, supplemented,
modified, amended, consolidated and/or restated
from time to time, including to add unpaid
interest to principal (the "Lonrho Notes");
6. Note Purchase Agreement dated 28th November,
1988, between Debtor (formerly known as ▇▇▇▇▇▇
Petroleum Inc.) and Thamesedge Limited
("Thamesedge"), as same has been, and as same
may be, supplemented, modified amended or
restated from time to time (the "Thamesedge
Note Purchase Agreement") and an Amended and
Restated Note dated as of 18th December, 1997
in the principal amount of US$75,000,000
(seventy-five million United States dollars)
which amends, restates and replaces that
certain Note dated 30th November, 1988, for
US$75,000,000.00 (seventy-five million United
States dollars) from Debtor to Thamesedge, as
same may be
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supplemented, modified, amended or restated
from time to time, including to add unpaid
interest to principal (the "Thamesedge Note");
The Thamesedge Note, the Lonrho Notes, the Via
Verde Notes, the Valley Gateway Note, the
Facility Note and the Revolving Credit Note,
are collectively referred to as the
"Indebtedness";
By assignment dated 29th March, 1996, between
Lonrho and Thamesedge, Lonrho assigned all of
its interests in any Indebtedness owed to it to
Thamesedge; and
By assignment dated 29th August, 1997, between
Thamesedge and LAGP, Thamesedge assigned all of
its interest in any Indebtedness owed to it to
LAGP.
2. Acknowledgment. The Debtor hereby acknowledges and
certifies and agrees that: (a) the pledge and security interest granted by the
Debtor to the Lender under this Agreement as Collateral for the Obligations (i)
remains and shall continue in full force and effect, both before and after
giving effect to this Amendment, (ii) is not subject to any defence,
counterclaim, set off, right of recoupment, abatement, reduction or other claim
or determination, and (iii) is and shall continue to be governed by the terms
and provisions of the Original Security Interest Agreement, as amended by this
Amendment and as the same may be further amended or otherwise modified from time
to time in accordance with the terms thereof.
3. Representations and Warranties. To induce the Lender to
enter into this Amendment and consummate the transactions contemplated hereby,
the Debtor hereby represents and warrants to the Lender that as of the date of
this Amendment the representations and warranties set forth in the Agreement are
true and correct in all material respects with the same effect as though those
representations and warranties had been made on and as of the date hereof.
4. Counterparts. This Amendment may be signed in two or more
counterpart copies, each of which may be executed by one or more of the parties
hereto, but all of which, when taken together, shall constitute a single
agreement binding upon all of the parties hereto.
5. Governing Law, Etc. This Amendment shall be governed by
and construed in accordance with the applicable terms and provisions of the
Original Security Interest Agreement (as amended hereby), which terms and
provisions are incorporated herein by reference.
[END OF PAGE]
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6. Agreement to Continue as Amended. The Original Security
Interest Agreement, as amended by this Amendment, shall remain and continue in
full force and effect from and after the date hereof.
IN WITNESS whereof the parties hereto have hereunto set their hands and seals
the day and year first above written.
The Common Seal of
LONDON AUSTRALIAN & GENERAL PROPERTY
COMPANY LIMITED
was hereunto affixed
in the presence of:
/s/ R.E. ▇▇▇▇▇▇▇ Director
---------------------------------
/s/ N. J. ▇▇▇▇▇▇▇ Director
---------------------------------
SIGNED BY
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duly authorized
for and on behalf of:
HONDO OIL & GAS
COMPANY
/s/ ▇▇▇▇ ▇. ▇▇▇▇ President
---------------------------------
THE COMMON SEAL of
---------------
FOLIO TRUST COMPANY LIMITED
was hereunto affixed
in the presence of:
/s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Director
---------------------------------
/s/ ▇▇▇▇▇▇▇▇ St. ▇▇▇▇▇ ▇▇▇▇▇▇ Director
---------------------------------
THE COMMON SEAL of
---------------
FOLIO NOMINEES LIMITED
was hereunto affixed
in the presence of:
/s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Director
---------------------------------
/s/ ▇▇▇▇▇▇▇▇ St. ▇▇▇▇▇ ▇▇▇▇▇▇ Director
---------------------------------
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