EXHIBIT 10.1
SECOND AMENDMENT TO THIRD
AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Third Amended and Restated Credit Agreement (this
"AMENDMENT") is dated as of November 15, 1995, by and between FIRST INTERSTATE
BANK OF TEXAS, N. A., a national banking association ("LENDER"), and BELLWETHER
EXPLORATION COMPANY, a Delaware corporation ("BORROWER").
WHEREAS, Lender and Borrower entered into that certain Third Amended and
Restated Credit Agreement dated as of February 28, 1995 (the "AGREEMENT"), in
order to restructure, modify, increase, extend and renew the obligations under
that certain Second Amended and Restated Credit Agreement dated as of March 14,
1994; and
WHEREAS, Lender, Borrower and certain pledgors of collateral securing the
obligations evidenced by the Agreement entered into that certain First Amendment
to Third Amended and Restated Credit Agreement dated June 1, 1995, to (i) amend
the Security Documents (as defined in the Agreement) effective as of February
28, 1995 to correct certain inadvertent errors; and (ii) amend the Agreement
effective as of June 30, 1995 to reflect the results of a Borrowing Base
redetermination, modify the maturity dates of the credit facilities evidenced
thereby and amend the covenant contained therein regarding the Borrower's
consolidated tangible net worth; and
WHEREAS, Hampton Resources Corporation, a Delaware corporation ("HAMPTON")
entered into an Agreement and Plan of Merger dated June 30, 1995 with Spectrum 7
Energy Corporation, a Colorado corporation, Cross ▇▇▇▇ Royalty Company, a Texas
corporation ("CROSS ▇▇▇▇") and Hampton Operating Company, a Texas corporation,
pursuant to which Spectrum 7 Energy Corporation, Cross ▇▇▇▇ and ▇▇▇▇▇▇▇
Operating Company were merged into Hampton; and
WHEREAS, Borrower entered into (i) an Agreement and Plan of Merger dated
June 30, 1995 with Hampton pursuant to which Hampton was merged into Borrower,
and (ii) an Agreement and Plan of Merger dated June 30, 1995 with Bellwether
Colorado pursuant to which Bellwether Colorado was merged into Borrower; and
WHEREAS, each of Bellwether Colorado, Cross ▇▇▇▇, and ▇▇▇▇▇▇▇ executed (i)
a Guaranty Agreement dated February 28, 1995, in favor of Lender, pursuant to
which each of said parties guaranteed the full and punctual payment and
discharge of all obligations evidenced by the Agreement; and (ii) one or more
Security Documents (as defined in the Agreement) pledging certain property as
security for said obligations; and
WHEREAS, on account of the merger transactions mentioned above, the
obligations and indebtedness evidenced by said Guaranty Agreements and Security
Documents are now the direct obligations and indebtedness of Borrower, and
WHEREAS, Lender and Borrower desire to further amend the Agreement
effective as of November 15, 1995 to (i) reflect the results of a Borrowing Base
redetermination, (ii) further extend the maturity dates of the credit facilities
evidenced thereby, and (iii) effectuate certain other technical amendments;
NOW THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby. All references to the "AGREEMENT" below shall,
unless the context otherwise requires, be references to the Agreement as
heretofore amended and as amended hereby.
ARTICLE II
Amendments to the Agreement
Section 2.01 Effective Date of Amendments to the Agreement. The amendments
to the Agreement set forth in this Article II shall be effective as of November
15, 1995.
Section 2.02 Amendment to Exhibit B. Exhibit B to the Agreement is amended
and restated in its entirety as set forth in Annex 1 hereto.
Section 2.03 Amendment to Exhibit C. Exhibit C to the Agreement is amended
and restated in its entirety as set forth in Annex 2 hereto.
Section 2.04 Amendment to Section 1.1. The definition "Guarantors" set
forth in Section 1.1 of the Agreement is hereby deleted and the following
definition of said term is hereby substituted in its place.
"GUARANTORS" means Associated, Gas Operations, Odyssey
and West Monroe, and "GUARANTOR" means any one of them.
Section 2.05 Amendment to Section 2.4. Section 2.4 of the Agreement shall
be amended and restated in its entirety as set forth below:
Section 2.4. NOTES; PRINCIPAL REDUCTIONS. The obligation of Borrower to
repay the Facility A Advances shall be evidenced by the Facility A Note, and
the obligation of Borrower to repay the Facility B Advances shall be
evidenced by the Facility B Note. The unpaid principal amounts of the Notes
from time to time
2
outstanding shall bear interest prior to maturity at a varying rate per annum
equal from day to day to the lesser of: (a) the Maximum Rate; or (b) the
Applicable Rate, each such change in the rate of interest charged hereunder
to become effective, without notice to Borrower, on the effective date of
each change in the Applicable Rate or the Maximum Rate, as the case may be;
provided, however, if at any time the rate of interest specified in clause
(b) preceding shall exceed the Maximum Rate, thereby causing the interest
hereunder to be limited to the Maximum Rate, then any subsequent reduction in
the Applicable Rate shall not reduce the rate of interest due thereon below
the Maximum Rate until the aggregate amount of interest accrued hereunder
equals the aggregate amount of interest which would have accrued if the
interest rate specified in clause (b) preceding had at all times been in
effect.
So long as no Event of Default shall have occurred, on the last day of
each December, March, June, and September commencing December 31, 1995,
Borrower shall make a principal payment on the Facility A Note in the amount
necessary to reduce the unpaid principal balance of the Facility A Note to an
amount equal the lesser of the Facility A Borrowing Base (set forth in
Exhibit B, Part I) as such Facility A Borrowing Base will be reduced on the
first day of the following month, or the Facility A Commitment, and Borrower
shall make a principal payment on the Facility B Note in the amount necessary
to reduce the unpaid principal balance of the Facility B Note to an amount
equal to the lesser of the Facility B Borrowing Base (set forth in Exhibit C,
Part I) as such Facility B Borrowing Base will be reduced on the first day of
the following month, or the Facility B Commitment.
Upon the occurrence of an Event of Default, and on the last day of each
calendar month thereafter, Borrower shall, make a principal payment on the
Facility A Note in the amount necessary to reduce the unpaid principal
balance of the Facility A Note to an amount equal the lesser of the Facility
A Borrowing Base (set forth in Exhibit B, Part II) as such Facility A
Borrowing Base will be reduced on the first day of the following month or the
Facility A Commitment, and Borrower shall make a principal payment on the
Facility B Note in the amount necessary to reduce the unpaid principal
balance of the Facility B Note to an amount equal to the lesser of the
Facility B Borrowing Base (set forth in Exhibit C, Part II) as such Facility
B Borrowing Base will be reduced on the first day of the following month or
the Facility B Commitment.
So long as no Event of Default shall have occurred, accrued and unpaid
interest on the unpaid principal balance of each of the Notes shall be due
and payable on the last day of each December, March, June and September
commencing December 31, 1995. All accrued and unpaid interest on the
principal balance of each of the Notes shall be due and payable upon the
occurrence of an
3
Event of Default and on the last day of each calendar month thereafter. Final
payments in the amount of all remaining principal and accrued and unpaid
interest, if any, under the Notes shall be due and payable on the Applicable
Maturity Date. All past due principal and interest under the Notes shall bear
interest at the Default Rate. Nothing in this Section shall be deemed to
alter or affect the rights of Lender: (i) to require principal reductions or
additional collateral pursuant to subsections , , and as to the Facility A
Note, or subsections and as to the Facility B Note, or (ii) to accelerate the
payment of either or both of the Notes or exercise any of its other remedies
under the Loan Documents upon the occurrence of an Event of Default.
Section 2.06 Arbitration Program. Article 10 of the Agreement shall be
deleted in its entirety and the following language shall be substituted
therefor:
"ARTICLE 10
"Section 10.1 Agreement for Binding Arbitration. The parties agree to be
bound by the terms and provisions of the current Arbitration Program of
First Interstate Bank of Texas, N. A., which is incorporated by reference
herein and is acknowledged as received by the parties, pursuant to which
any and all disputes shall be resolved by mandatory binding arbitration
upon the request of either party."
The definition of "ARBITRATION PROGRAM" in the Agreement shall be deleted in its
entirety and the following language shall be substituted therefor:
"ARBITRATION PROGRAM" means the current Arbitration Program published by
First Interstate Bank of Texas, N. A. attached hereto as Exhibit "K"
hereto, which is incorporated by reference herein and is acknowledged as
received by the parties, pursuant to which any and all disputes shall be
resolved by mandatory binding arbitration upon the request of either party
as the same may be from time to time modified, amended or supplemented;
provided, however, that Lender shall provide prior written notice of any
such amendment, modification or supplement to Borrower.
There shall be added an Exhibit K to the Agreement with such Exhibit K to
read as set forth in Annex 3 hereto.
Section 2.07 Maturity Dates. The definition of "APPLICABLE MATURITY DATE"
in the Agreement shall be deleted in its entirety and the following language
shall be substituted therefor:
"APPLICABLE MATURITY DATE" means: (i) with respect to the Facility A Note
or a Facility A Advance, January 31, 2001, or such earlier date on which
the
4
obligation of Lender to make Facility A Advances terminates and the
Facility A Obligations are due and payable as provided herein (the
"FACILITY A MATURITY DATE"), and (ii) with respect to the Facility B Note
or a Facility B Advance, January 31, 2001, or such earlier date on which
the Facility B Obligations are due and payable as provided herein (the
"FACILITY B MATURITY DATE").
Section 2.08 Restatement of Indemnification and Waiver Provisions. Sections
11.2 and 11.3 are amended and restated in their entirety as set forth below in
order to make them more conspicuous.
Section 11.2 INDEMNIFICATION. BORROWER HEREBY INDEMNIFIES LENDER AND
EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AND AGENTS FROM, AND HOLDS EACH OF THEM HARMLESS AGAINST, ANY
AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, COSTS,
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS FEES) TO WHICH ANY OF THEM MAY
BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO: (A)
THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS; (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS; (C) ANY BREACH BY BORROWER OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF
THE LOAN DOCUMENTS; (D) THE PRESENCE, RELEASE, THREATENED RELEASE,
DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE LOCATED ON, ABOUT,
WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF BORROWER OR ANY
RELATED PERSON; (E) THE FAILURE OF TITLE TO ALL OR PART OF THE MORTGAGED
PROPERTIES OR THE FACILITY B COLLATERAL OR THE FAILURE OR INABILITY OF
BORROWER, FOR ANY REASON, TO CONVEY THE RIGHTS, TITLES, AND INTERESTS WHICH
ANY SECURITY DOCUMENT PURPORTS TO MORTGAGE, CONVEY, GRANT, OR ASSIGN; OR
(F) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL
BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, COSTS, AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING
5
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT) OF THE PERSON TO BE INDEMNIFIED. THE OBLIGATIONS OF
BORROWER UNDER THIS SECTION SHALL SURVIVE THE REPAYMENT OF THE NOTES.
SECTION 11.3 LIMITATION OF LIABILITY . NEITHER LENDER NOR ANY AFFILIATE,
OFFICER, DIRECTOR, EMPLOYEE, ATTORNEY, OR AGENT OF LENDER SHALL HAVE ANY
LIABILITY WITH RESPECT TO, AND BORROWER HEREBY WAIVES, RELEASES, AND AGREES
NOT TO ▇▇▇ ANY OF THEM UPON, ANY CLAIM FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY BORROWER IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (EXCLUDING CLAIMS IN
CONNECTION WITH OR ARISING OUT OF THE WILLFUL MISCONDUCT OF THE RELEVANT
PERSON). BORROWER HEREBY WAIVES, RELEASES, AND AGREES NOT TO ▇▇▇ LENDER OR
ANY OF LENDER'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, OR
AGENTS FOR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM (EXCLUDING CLAIMS IN
CONNECTION WITH OR ARISING OUT OF THE WILLFUL MISCONDUCT OF THE RELEVANT
PERSON) IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
ARTICLE III
Ratifications, Representations and Warranties
Section 3.01 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Documents and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrower and Lender agree that the Agreement and other Loan Documents
as amended hereby shall continue to be legal, valid, binding, and enforceable in
accordance with its terms.
Section 3.02. Representations and Warranties. Borrower hereby represents
and warrants to Lender that (i) the execution, delivery, and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite action on the their
part of Borrower and Guarantors and will not violate the articles of
incorporation or bylaws of Borrower or Guarantors, (ii) the representations and
warranties
6
contained in the Agreement and Security Documents, as amended hereby, and any
other Loan Document are true and correct on and as of the date hereof as though
made on and as of the date hereof, (iii) no Event of Default has occurred and is
continuing and no event or condition has occurred that with the giving of notice
or lapse or time or both would be an Event of Default, and (iv) Borrower and
Guarantors are in full compliance with all covenants and agreements contained in
the Loan Documents as amended hereby.
ARTICLE IV
Conditions Precedent
4.01 Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
(a) Lender shall have received all of the following, each dated (unless
otherwise indicated) the date of this Modification Agreement, in form and
substance satisfactory to Lender:
(1) Incumbency. A certificate of incumbency of all officers of
Borrower and Guarantors who will be authorized to execute or attest
this Modification Agreement on behalf of Borrower or Guarantors,
executed by the President or any Vice President and by the Secretary
or Assistant Secretary of Borrower and each of the Guarantors dated as
of the date hereof;
(2) Resolutions. Copy of resolutions for Borrower and Guarantors
authorizing the transactions contemplated hereby, duly adopted by the
Boards of Directors of each of Borrower and Guarantors, accompanied by
a certificate of the Secretary or Assistant Secretary of each of
Borrower and Guarantors, dated as of the date hereof, to the effect
that such copy is a true and correct copy of resolutions duly adopted
at a meeting of, or by the unanimous written consent of, the Boards of
Directors of each of Borrower and Guarantors, and that such
resolutions have not been amended, modified, or revoked in any respect
and are in full force and effect on the date hereof;
(b) The representations and warranties contained herein and in all other
Loan Documents, as amended hereby, shall be true and correct as of the date
hereof as if made on the date hereof;
(c) No Event of Default shall have occurred and be continuing and no event
or condition shall have occurred that with the giving of notice or lapse of
time or both would be an Event of Default; and
7
(d) All corporate proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments, and other
legal matters incident thereto shall be satisfactory to Lender.
(e) Lender shall have received, on or before the date this agreement is
fully executed, a fee in the amount of $7,748.34 in fully transferable and
available funds.
ARTICLE V
Modification and Reaffirmation of Guaranty Agreements and Security Documents
Section 5.01. Modification and Reaffirmation of Guaranty Agreements and
Security Documents. By its execution of this Agreement, Borrower hereby
reaffirms its obligations under all Guaranty Agreements and Security Documents
previously executed and delivered by Bellwether Colorado, Cross ▇▇▇▇ or ▇▇▇▇▇▇▇.
In particular, Borrower acknowledges and agrees that it will be and become the
primary obligor under each of said instruments. Each Guaranty Agreement and
Security Document is amended to reflect that the obligations guaranteed or
secured thereby are the Obligations as modified in this Amendment.
Section 5.02. Further Assurances. Contemporaneously with the execution of
this Amendment, Borrower will execute and deliver to Lender amendments to all
financing statements executed by Bellwether Colorado, Cross ▇▇▇▇ or Hampton in
favor of Lender. Borrower will also execute and deliver any other instruments
that may be requested by Lender to effectuate the purposes of this Amendment.
ARTICLE VI
Miscellaneous
Section 6.01. Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation, and execution of this Amendment and the other
Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the costs
and fees of Lender's legal counsel, and all costs and expenses incurred by
Lender in connection with the enforcement or preservation of any rights under
the Agreement, as amended hereby, or any other Loan Document, including without
limitation the costs and fees of Lender's legal counsel.
Section 6.02. Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the reminder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
8
Section 6.03 Applicable Law. This Amendment and all other Loan Documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Houston, ▇▇▇▇▇▇ County, Texas and shall be governed by and construed in
accordance with the laws of the state of Texas.
Section 6.04 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender, Borrower and Guarantors, their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
Section 6.05 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 6.06 Effect of Waiver. No consent or waiver, express or implied by
Lender to or for any breach of or deviation from any covenant, condition or duty
by Borrower or any of the Guarantors shall be deemed a consent or waiver to or
of any other breach of the same or any other covenant, condition or duty.
Section 6.07 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment,
Section 6.08 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENT EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT
EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY
AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED
OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO, THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
9
IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment as of
the date first above written.
BORROWER:
BELLWETHER EXPLORATION COMPANY
By: /s/ ▇. ▇▇▇▇▇ Sere
-----------------------------
▇. ▇▇▇▇▇ Sere
President and Chief Executive Officer
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Banking Officer
10
The undersigned Guarantors hereby consent and agree to this Amendment and
the transactions contemplated hereby and agree that their Guaranty Agreements
and the Security Documents signed by each of them shall remain in full force and
effect and shall continue to be the legal, valid and binding obligations of each
Guarantor enforceable against each Guarantor in accordance with the terms
thereof. Guarantors agree to be bound by the terms and provisions of the
current Arbitration Program of First Interstate Bank of Texas, N. A., which is
incorporated by reference herein and is acknowledged as received by each of the
Guarantors, pursuant to which any and all disputes shall be resolved by
mandatory binding arbitration upon the request of any party. THIS AMENDMENT,
THE GUARANTY AGREEMENTS AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, EMBODY
THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
GUARANTORS:
ASSOCIATED GAS RESOURCES, INC., a Texas
corporation
By: /s/ ▇. ▇▇▇▇▇ Sere
------------------------------
▇. ▇▇▇▇▇ Sere
President
GAS OPERATIONS, INC., a Louisiana
corporation
By: /s/ ▇. ▇▇▇▇▇ Sere
-------------------------------
▇. ▇▇▇▇▇ Sere
President
11
ODYSSEY PETROLEUM COMPANY, a Delaware
corporation
By: /s/ ▇.▇▇▇▇▇ Sere
--------------------------------
▇. ▇▇▇▇▇ Sere
Vice President
WEST MONROE GAS GATHERING CORPORATION
By: /s/ ▇. ▇▇▇▇▇ Sere
--------------------------------
▇. ▇▇▇▇▇ Sere
President
12
ANNEX 1
FACILITY A BORROWING BASE
EXHIBIT "B"
EXHIBIT B - PART I
FACILITY A BORROWING BASE
PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
$19,150,000.00 November 15, 1995 to December 31, 1995
18,322,000.00 January 1, 1996 to March 31, 1996
17,494,000.00 April 1, 1996 to June 30, 1996
16,306,000.00 July 1, 1996 to September 30, 1996
15,118,000.00 October 1, 1996 to December 31, 1996
13,930,000.00 January 1, 1997 to March 31, 1997
12,891,040.00 April 1, 1997 to June 30, 1997
11,852,080.00 July 1, 1997 to September 30, 1997
10,813,120.00 October 1, 1997 to December 31, 1997
9,774,160.00 January 1, 1998 to March 31, 1998
8,889,100.00 April 1, 1998 to June 30, 1998
8,004,040.00 July 1, 1998 to September 30, 1998
7,118,980.00 October 1, 1998 to December 31, 1998
6,233,920.00 January 1, 1999 to March 31, 1999
5,403,220.00 April 1, 1999 to June 30, 1999
4,572,520.00 July 1, 1999 to September 30, 1999
3,741,820.00 October 1, 1999 to December 31, 1999
2,911,120.00 January 1, 2000 to March 31, 2000
2,240,620.00 April 1, 2000 to June 30, 2000
Exhibit B page 1
EXHIBIT B - PART I
FACILITY A BORROWING BASE
PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
1,570,120.00 July 1, 2000 to September 30, 2000
899,620.00 October 1, 2000 to December 31, 2000
229,120.00 January 1, 2001 to January 30, 2001
========================================================
Exhibit B page 2
EXHIBIT B - PART II
FACILITY A BORROWING BASE
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
$19,150,000.00 November 15, 1995 to November 30, 1995
18,736,000.00 December 1, 1995 to December 31, 1995
18,322,000.00 January 1, 1996 to January 31, 1996
18,046,000.00 February 1, 1996 to February 29, 1996
17,770,000.00 March 1, 1996 to March 31, 1996
17,494,000.00 April 1, 1996 to April 30, 1996
17,098,000.00 May 1, 1996 to May 31, 1996
16,702,000.00 June 1, 1996 to June 30, 1996
16,306,000.00 July 1, 1996 to July 31, 1996
15,910,000.00 August 1, 1996 to August 31, 1996
15,514,000.00 September 1, 1996 to September 30, 1996
15,118,000.00 October 1, 1996 to October 31, 1996
14,722,000.00 November 1, 1996 to November 30, 1996
14,326,000.00 December 1, 1996 to December 31, 1996
13,930,000.00 January 1, 1997 to January 31, 1997
13,583,680.00 February 1, 1997 to February 28, 1997
13,237,360.00 March 1, 1997 to March 31, 1997
12,891,040.00 April 1, 1997 to April 30, 1997
12,544,720.00 May 1, 1997 to May 31, 1997
12,198,400.00 June 1, 1997 to June 30, 1997
11,852,080.00 July 1, 1997 to July 31, 1997
11,505,760.00 August 1, 1997 to August 31, 1997
Exhibit B page 3
EXHIBIT B - PART II
FACILITY A BORROWING BASE
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
11,159,440.00 September 1, 1997 to September 30, 1997
10,813,120.00 October 1, 1997 to October 31, 1997
10,466,800.00 November 1, 1997 to November 30, 1997
10,120,480.00 December 1, 1997 to December 31, 1997
9,774,160.00 January 1, 1998 to January 31, 1998
9,479,140.00 February 1, 1998 to February 28, 1998
9,184,120.00 March 1, 1998 to March 31, 1998
8,889,100.00 April 1, 1998 to April 30, 1998
8,594,080.00 May 1, 1998 to May 31, 1998
8,299,060.00 June 1, 1998 to June 30, 1998
8,004,040.00 July 1, 1998 to July 31, 1998
7,709,020.00 August 1, 1998 to August 31, 1998
7,414,000.00 September 1, 1998 to September 30, 1998
7,118,980.00 October 1, 1998 to October 31, 1998
6,823,960.00 November 1, 1998 to November 30, 1998
6,528,940.00 December 1, 1998 to December 31, 1998
6,233,920.00 January 1, 1999 to January 31, 1999
5,957,020.00 February 1, 1999 to February 28, 1999
5,680,120.00 March 1, 1999 to March 31, 1999
5,403,220.00 April 1, 1999 to April 30, 1999
5,126,320.00 May 1, 1999 to May 31, 1999
4,849,420.00 June 1, 1999 to June 30, 1999
Exhibit B page 4
EXHIBIT B - PART II
FACILITY A BORROWING BASE
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
4,572,520.00 July 1, 1999 to July 31, 1999
4,295,620.00 August 1, 1999 to August 31, 1999
4,018,720.00 September 1, 1999 to September 30, 1999
3,741,820.00 October 1, 1999 to October 31, 1999
3,464,920.00 November 1, 1999 to November 30, 1999
3,188,020.00 December 1, 1999 to December 31, 1999
2,911,120.00 January 1, 2000 to January 31, 2000
2,687,620.00 February 1, 2000 to February 29, 2000
2,464,120.00 March 1, 2000 to March 31, 2000
2,240,620.00 April 1, 2000 to April 30, 2000
2,017,120.00 May 1, 2000 to May 31, 2000
1,793,620.00 June 1, 2000 to June 30, 2000
1,570,120.00 July 1, 2000 to July 31, 2000
1,346,620.00 August 1, 2000 to August 31, 2000
1,123,120.00 September 1, 2000 to September 30, 2000
899,620.00 October 1, 2000 to October 31, 2000
676,120.00 November 1, 2000 to November 30, 2000
452,620.00 December 1, 2000 to December 31, 2000
229,120.00 January 1, 2001 to January 30, 2001
========================================================
Exhibit B page 5
ANNEX 2
EXHIBIT "C"
FACILITY B BORROWING BASE
EXHIBIT C - PART I
FACILITY B BORROWING BASE
PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
$7,450,000.00 November 15, 1995 to December 31, 1995
7,128,000.00 January 1, 1996 to March 31, 1996
6,806,000.00 April 1, 1996 to June 30, 1996
6,344,000.00 July 1, 1996 to September 30, 1996
5,882,000.00 October 1, 1996 to December 31, 1996
5,420,000.00 January 1, 1997 to March 31, 1997
5,015,960.00 April 1, 1997 to June 30, 1997
4,611,920.00 July 1, 1997 to September 30, 1997
4,207,880.00 October 1, 1997 to December 31, 1997
3,803,840.00 January 1, 1998 to March 31, 1998
3,459,650.00 April 1, 1998 to June 30, 1998
3,115,460.00 July 1, 1998 to September 30, 1998
2,771,270.00 October 1, 1998 to December 31, 1998
2,427,080.00 January 1, 1999 to March 31, 1999
2,104,030.00 April 1, 1999 to June 30, 1999
1,780,980.00 July 1, 1999 to September 30, 1999
1,457,930.00 October 1, 1999 to December 31, 1999
1,134,880.00 January 1, 2000 to March 31, 2000
Exhibit C page 1
EXHIBIT C - PART I
FACILITY B BORROWING BASE
PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
874,130.00 April 1, 2000 to June 30, 2000
613,380.00 July 1, 2000 to September 30, 2000
352,630.00 October 1, 2000 to December 31, 2000
91,880.00 January 1, 2001 to January 30, 2001
========================================================
Exhibit C page 2
EXHIBIT C - PART II
FACILITY B BORROWING BASE
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
$7,450,000.00 November 15, 1995 to November 30, 1995
7,289,000.00 December 1, 1995 to December 31, 1995
7,128,000.00 January 1, 1996 to January 31, 1996
7,020,666.67 February 1, 1996 to February 29, 1996
6,913,333.33 March 1, 1996 to March 31, 1996
6,806,000.00 April 1, 1996 to April 30, 1996
6,652,000.00 May 1, 1996 to May 31, 1996
6,498,000.00 June 1, 1996 to June 30, 1996
6,344,000.00 July 1, 1996 to July 31, 1996
6,190,000.00 August 1, 1996 to August 31, 1996
6,036,000.00 September 1, 1996 to September 30, 1996
5,882,000.00 October 1, 1996 to October 31, 1996
5,728,000.00 November 1, 1996 to November 30, 1996
5,574,000.00 December 1, 1996 to December 31, 1996
5,420,000.00 January 1, 1997 to January 31, 1997
5,285,320.00 February 1, 1997 to February 28, 1997
5,150,640.00 March 1, 1997 to March 31, 1997
5,015,960.00 April 1, 1997 to April 30, 1997
4,881,280.00 May 1, 1997 to May 31, 1997
4,746,600.00 June 1, 1997 to June 30, 1997
4,611,920.00 July 1, 1997 to July 31, 1997
4,477,240.00 August 1, 1997 to August 31, 1997
Exhibit C page 3
EXHIBIT C - PART II
FACILITY B BORROWING BASE
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT
--------------------------------------------------------
Borrowing Base Period
========================================================
4,342,560.00 September 1, 1997 to September 30, 1997
4,207,880.00 October 1, 1997 to October 31, 1997
4,073,200.00 November 1, 1997 to November 30, 1997
3,938,520.00 December 1, 1997 to December 31, 1997
3,803,840.00 January 1, 1998 to January 31, 1998
3,689,110.00 February 1, 1998 to February 28, 1998
3,574,380.00 March 1, 1998 to March 31, 1998
3,459,650.00 April 1, 1998 to April 30, 1998
3,344,920.00 May 1, 1998 to May 31, 1998
3,230,190.00 June 1, 1998 to June 30, 1998
3,115,460.00 July 1, 1998 to July 31, 1998
3,000,730.00 August 1, 1998 to August 31, 1998
2,886,000.00 September 1, 1998 to September 30, 1998
2,771,270.00 October 1, 1998 to October 31, 1998
2,656,540.00 November 1, 1998 to November 30, 1998
2,541,810.00 December 1, 1998 to December 31, 1998
2,427,080.00 January 1, 1999 to January 31, 1999
2,319,396.67 February 1, 1999 to February 28, 1999
2,211,713.33 March 1, 1999 to March 31, 1999
2,104,030.00 April 1, 1999 to April 30, 1999
1,996,346.67 May 1, 1999 to May 31, 1999
1,888,663.33 June 1, 1999 to June 30, 1999
1,780,980.00 July 1, 1999 to July 31, 1999
1,673,296.67 August 1, 1999 to August 31, 1999
1,565,613.33 September 1, 1999 to September 30, 1999
1,457,930.00 October 1, 1999 to October 31, 1999
1,350,246.67 November 1, 1999 to November 30, 1999
1,242,563.33 December 1, 1999 to December 31, 1999
1,134,880.00 January 1, 2000 to January 31, 2000
1,047,963.33 February 1, 2000 to February 29, 2000
961,046.67 March 1, 2000 to March 31, 2000
874,130.00 April 1, 2000 to April 30, 2000
787,213.33 May 1, 2000 to May 31, 2000
700,296.67 June 1, 2000 to June 30, 2000
613,380.00 July 1, 2000 to July 31, 2000
526,463.33 August 1, 2000 to August 31, 2000
439,546.67 September 1, 2000 to September 30, 2000
352,630.00 October 1, 2000 to October 31, 2000
265,713.33 November 1, 2000 to November 30, 2000
178,796.67 December 1, 2000 to December 31, 2000
91,880.00 January 1, 2001 to January 30, 2001
========================================================
Exhibit C page 4
ANNEX 3
ARBITRATION PROGRAM
EXHIBIT "K"
[LOGO OF FIRST INTERSTATE BANK APPEARS HERE]
ARBITRATION PROGRAM
(a) Binding Arbitration. Upon the demand of any party, whether made before
or after the institution of any judicial proceeding, any Dispute (as defined
below) shall be resolved by binding arbitration in accordance with the terms of
this Arbitration Program. A "Dispute" shall include any action, dispute, claim,
or controversy of any kind, whether in contract or in tort, statutory or common
law, legal or equitable, or otherwise, now existing or hereafter arising between
the parties in any way arising out of, pertaining to or in connection with (1)
any agreement, document or instrument to which this Arbitration Program is
attached or in which it is referred to or any related agreements, documents, or
instruments (the "Documents"), (2) all past, present, or future loans, notes,
instruments, drafts, credits, accounts, deposit accounts, safe deposit boxes,
safekeeping agreements, guarantees, letters of credit, goods or services, or
other transactions, contracts or agreements of any kind whatsoever, (3) any
past, present or future incidents, omissions, acts, errors, practices, or
occurrences causing injury to either party whereby the other party or its
agents, employees or representatives may be liable, in whole or in part, or (4)
any other aspect of the past, present, or future relationships of the parties
including any agency, independent contractor or employment relationship but
excluding claims for workers' compensation and unemployment benefits
("Relationship"). Any party to this Arbitration Program may by summary
proceedings bring any action in court to compel arbitration of any Dispute. Any
party who fails or refuses to submit to binding arbitration following a lawful
demand by the opposing party shall bear all costs and expenses incurred by the
opposing party in compelling arbitration of any Dispute. The parties agree that
by engaging in activities with or involving each other as described above, they
are participating in transactions involving interstate commerce. THE PARTIES
UNDERSTAND THAT PURSUANT TO THIS ARBITRATION PROGRAM, DISPUTES SUBMITTED TO
ARBITRATION WILL NOT BE DECIDED THROUGH LITIGATION IN FEDERAL OR STATE COURTS
BEFORE A JUDGE OR JURY.
(b) Governing Rules. All Disputes between the parties submitted to
arbitration shall be resolved by binding arbitration administered by the
American Arbitration Association (the "AAA") in accordance with the Commercial
Arbitration Rules of the AAA, the Federal Arbitration Act (Title 9 of the United
States Code) and to the extent the foregoing are inapplicable, unenforceable or
invalid, the laws of the State of Texas. In the event of any inconsistency
between this Arbitration Program and such rules and statutes, this Arbitration
Program shall control. Judgment upon any award rendered hereunder may be
entered in any court having jurisdiction; provided, however, that nothing
contained herein shall be deemed to be a waiver by any party that's a bank of
the protections afforded to it under 12 U.S.C. (S) 91 or Texas Banking Code art.
342-609.
(c) No Waiver, Preservation or Remedies, Multiple Parties. No provision of,
nor the exercise of any rights under, this Arbitration Program shall limit the
right of any party, during any Dispute, to seek, use, and employ ancillary or
preliminary remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting, foreclosing or proceeding under forcible entry and
detainer for possession of any real or personal property, and any such action
shall not be deemed an election of remedies. Such rights shall include without
limitation, rights and remedies relating to (1) foreclosing against any real or
personal property collateral or other security, (2) exercising self-help
remedies including setoff rights or (3) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment, garnishment, or
the appointment of a receiver from a court having jurisdiction. Such rights can
be exercised at any time except to the extent such action is contrary to a final
award or decision in any arbitration proceeding. The institution and maintenance
of an action for judicial relief or pursuit of provisional or ancillary remedies
or exercise of self-help remedies shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the Dispute to arbitration, nor
render inapplicable the compulsory arbitration provisions hereof. In Disputes
involving indebtedness or other monetary obligations, each party agrees that the
other party may proceed against all liable persons, jointly or severally, or
against one or more of them, less than all, without impairing
1
rights against other liable persons. Nor shall a party be required to join the
principal obligor or any other liable persons, such as sureties or guarantors,
in any proceeding against a particular person. A party may release or settle
with one or more liable persons without releasing or impairing rights to proceed
against any persons not so released.
(d) Arbitrator Powers and Qualifications; Awards. Arbitrators are empowered
to resolve Disputes by summary rulings. Arbitrators shall resolve all Disputes
in accordance with the applicable substantive law. Any arbitrator selected shall
be required to be a practicing attorney licensed to practice law in the State of
Texas and shall be required to be experienced and knowledgeable in the
substantive laws applicable to the subject matter of the Dispute. All statutes
of limitation applicable to any Dispute shall apply to any proceeding in
accordance with this Arbitration Program. With respect to a Dispute in which the
claims or amounts in controversy do not exceed $1,000,000, a single arbitrator
shall be chosen and shall resolve the Dispute by rendering an award not to
exceed $1,000,000, including all damages of any kind whatsoever, including
costs, fees and expenses. A Dispute involving claims or amounts in controversy
exceeding $1,000,000, shall be decided by a majority vote of a panel of three
arbitrators (an "Arbitration Panel"), the determination of any two of the three
arbitrators constituting the determination of the Arbitration Panel, provided,
however, that all three Arbitrators on the Arbitration Panel must actively
participate in all hearings and deliberations. Arbitrators, including any
Arbitration Panel, may grant any remedy or relief deemed just and equitable and
within the scope of this Arbitration Program and may also grant such ancillary
relief as is necessary to make effective any award. Arbitrators shall be
empowered to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the Texas Rules of Civil Procedure and applicable law.
Arbitrators and Arbitration Panels shall be required to make specific, written
findings of fact and conclusions of law. The determination of an Arbitrator or
Arbitration Panel shall be binding on all parties and shall not be subject to
further review or appeal except as otherwise allowed by applicable law.
(e) Miscellaneous. To the maximum extent practicable, the AAA, the
Arbitrator (or the Arbitration Panel, as appropriate) and the parties shall take
any action necessary to require that an arbitration proceeding hereunder shall
be concluded within 180 days of the filing of the Dispute with the AAA.
Arbitration proceedings hereunder shall be conducted in the State of Texas at a
location selected by the Administrator. With respect to any Dispute, each party
agrees that all discovery activities shall be expressly limited to matters
directly relevant to the Dispute and any Arbitrator, Arbitration Panel and the
AAA shall be required to fully enforce this requirement. This Arbitration
Program constitutes the entire agreement of the parties with respect to its
subject matter and supersedes all prior discussions, arrangements, negotiations,
and other communications on dispute resolution. The provisions of this
Arbitration Program shall survive any termination, amendment, or expiration of
the Documents or the Relationship, unless the parties otherwise expressly agree
in writing. To the extent permitted by applicable law, Arbitrators, including
any Arbitration Panel shall have the power to award recovery of all costs and
fees (including attorneys' fees, administrative fees, and arbitrators' fees) to
the prevailing party. This Arbitration Program may be amended, changed, or
modified only by the express provisions of a writing which specifically refers
to this Arbitration Program and which is signed by all the parties hereto. If
any term, covenant, condition or provision of this Arbitration Program is found
to be unlawful, invalid or unenforceable, such defect shall not affect the
legality, validity or enforceability of the remaining parts of this Arbitration
Program, and all such remaining parts hereof shall be valid and enforceable and
have full force and effect as if the illegal, invalid or unenforceable part had
not been included. Each party agrees to keep all Disputes subject to arbitration
proceedings strictly confidential, except for disclosures of information
required in the ordinary course of business of the parties or by applicable law
or regulation.
Revision Date: 9/23/94