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EXHIBIT 99.B3
THIRD AMENDMENT TO
LOAN AGREEMENT DATED JANUARY 15, 1998
BY AND AMONG
SAN XXXX PARTNERS, L.L.C.
AND
BANK ONE, TEXAS, N.A.
This Third Amendment to Loan Agreement dated January 15, 1998,
is entered into as of December 31, 1998 (this "Third 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, as amended by the First Amendment dated January 3, 1998 and the Second
Amendment dated October 9, 1998 (the "Loan Agreement").
Borrower has requested that Bank revise 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 of this Third
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 definition:
"Third Amendment" means the Third Amendment to the Loan Agreement
dated December 31, 1998.
Section 2.08 of the Loan Agreement, as amended by the First and
Second Amendments, is hereby amended by replacing the first sentence of that
Section with the following text:
The Borrowing Base is hereby established, effective October 1, 1998,
as being (i) the Lessor of: (a) four dollars and thirty-seven cents
($4.37), or (b) fifty percent (50%) of the Current Market Price at
which Trust Units trade, from time to time; times the number of Trust
Units owned by Borrower and included in the Borrowing Base Property,
not to exceed $26,500,000 as of October 1, 1998; provided, however,
that the value allocated to each Trust Unit under subsection
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(i)(a) above, shall be reduced by twelve cents ($.12) at the end of
each fiscal quarter beginning December 31, 1998 and thereafter.
II. Certain Waivers and Consents.
Bank hereby consents to distributions to Borrower from the Cash
Collateral Account in the aggregate amount of $587,000.00 that have
been or will be made during calendar year 1998, and Bank waives any
non-compliance with Section 5.20(c) of the Loan Agreement that
otherwise would have resulted from such distributions, provided,
however, that such distributions shall be deemed to be inclusive of
the $25,000.00 per calendar quarter that Borrower is entitled to
receive from the Cash Collateral Account pursuant to the proviso at
the end of Section 5.20(c).
III. Conditions to Third Amendment. This Third Amendment shall not become
effective until the following conditions have been satisfied:
A. Bank shall have received multiple counterparts of the Third
Amendment, as requested by Bank, duly executed on behalf of Borrower.
IV. Extent of Amendments. This Third 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 Third 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.
V. Reaffirmation of Representations and Warranties. To induce the Bank
to enter into this Third 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 Third Amendment and the
performance of Borrower of its obligations under this Third Amendment
are within Borrower's power, have been duly authorized by all
necessary LLC 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,
articles of organization or regulations of the Borrower or of any
agreement binding upon Borrower.
B. This Third Amendment represents the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with its terms subject as to
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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.
VI. Defined Terms. Terms used herein that are defined in the Loan
Agreement shall have the same meanings herein, unless the context otherwise
requires.
VII. Reaffirmation of Loan Agreement. This Third 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.
VIII. Governing Law. THIS THIRD 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 Third 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 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 Third 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.
IX. Severability. Whenever possible each provision of this Third
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Third 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 Third Amendment.
X. Execution in Counterparts. This Third 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.
XI. Section Captions. Section captions used in this Third Amendment are
for convenience of reference only, and shall not affect the construction of this
Third Amendment.
XII. Successors and Assigns. This Third 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.
XIII. 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
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Loan Agreement, this Third Amendment or any of the other Loan Documents or to
the transactions contemplated hereby.
XIV. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Third
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:
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C.N. X'Xxxxxxxx
President
BANK:
BANK ONE, TEXAS, N.A.
By:
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Xxxxx Xxxxxx
Vice President
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