Exhibit 10.1

 

SECOND AMENDED AND RESTATED PROMISSORY NOTE

 

$4,000,000.00

June 25, 2008

 

FOR VALUE RECEIVED, MESA OFFSHORE TRUST, a trust formed under the laws of the
State of Texas and having an address at 919 Congress Avenue, Austin, Texas
78701, by and through JPMORGAN CHASE BANK, N.A (as successor to Texas Commerce
Bank National Association), solely in its capacity as Trustee (in such capacity,
the “Trustee”) for MESA OFFSHORE TRUST (the “Borrower”) pursuant to the Royalty
Trust Indenture dated as of December 1, 1982 (the “Trust Indenture”), by and
between Mesa Petroleum Co., as Trustor, and the Trustee, promises to pay on the
Maturity Date (as defined below), to the order of JPMORGAN CHASE BANK, N.A. (the
“Lender”), whose address is 1111 Polaris Parkway, Columbus, Ohio 43240, at said
address or such other address as may be designated in writing by the holder
hereof from time to time, the principal sum of  FOUR MILLION AND No/100 Dollars
($4,000,000.00), or, if less, the aggregate unpaid principal amount of all loans
(collectively, the “Loans”, and each a “Loan”) made by the Lender to the
Borrower, together with interest on said principal, at a rate per annum equal to
Prime Rate plus two percent (2%); provided, however, that in no event shall such
rate exceed the maximum legal rate of interest permitted by applicable law.  The
Borrower promises to pay interest on the unpaid principal amount of each Loan
from the date such Loan is made until such principal amount is paid in full, in
arrears, at the interest rate specified herein.  As used herein the term “Prime
Rate” means the rate of interest from time to time announced publicly by the
Lender at its principal office as its prime commercial lending rate, it being
understood that such rate is not necessarily the lowest or best rate actually
charged to any customer and that the Lender may make various commercial or other
loans at rates of interest having no relationship to such rate.

 

This Second Amended and Restated Promissory Note (the “Note”) evidences an
extension of credit for borrowed money authorized under Section 3.07 of the
Trust Indenture, and amends, restates, renews and extends the Amended and
Restated Promissory Note dated December 3, 2007 executed by the Borrower to the
order of the Lender (the “Amended Note”).  On the date hereof, the outstanding
principal amount of Demand Loans, under and as defined in the Amended Note, is
Two million eight hundred sixty seven thousand eight hundred forty seven dollars
and seventeen cents ($2,867,847.17), and all such Demand Loans shall be Loans
hereunder.  This Note shall have the priority with regard to payments set forth
in Section 3.07 of the Trust Indenture, and the Borrower agrees to comply with
Section 3.07 of the Trust Indenture with regards to distributions to its
unitholders.

 

The Borrower may prepay all or any portion of the outstanding principal under
this Note together with accrued and unpaid interest on such principal, at any
time without premium or penalty; provided, however, that any principal amount so
repaid may not be reborrowed.

 

Except with respect to interest on the principal amount of the Loans prepaid
hereunder, interest on the Loans shall be due and payable on the Maturity Date. 
Interest on the outstanding principal as well as the outstanding principal
balance of the Loans shall be recorded by the Lender on its books and records
(which may be electronic in nature) and at any time and

 

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from time to time and may be entered by the Lender on the schedule attached or
any continuation of the schedule attached hereto by the Lender; provided,
however, at the discretion of the Lender, any such entries may aggregate Loans
(and payments thereon) with the same interest rate and tenor and, if made on a
given date, may show only the Loans outstanding on such date.

 

Until the Maturity Date has occurred and so long as no Event of Default exists,
the Borrower may obtain Loans under this Note; provided, however, the amount of
Loans made hereunder (without regard to any repayment or prepayment thereof)
shall not exceed $4,000,000.00.  As used herein, the term “Event of Default”
means the occurrence of any one or more of the following events: (1) the
Borrower fails to pay any amount of principal or interest when due hereunder,
(2) the Borrower or the Trustee is declared insolvent or is the subject of any
proceeding in bankruptcy, (3) the sale of all or substantially all of the assets
of Mesa Offshore Royalty Partnership (the “Partnership”), and (4) the
commencement of any litigation (other than the Lawsuit, defined below,),
directly or indirectly, by any Trustee or any current Plaintiff or Intervenor in
the Lawsuit, defined below, including successors or assigns, against the Lender
in its individual capacity for any claim arising out of or relating to the Mesa
Offshore Trust.  As used herein, the term “Maturity Date” means the earliest to
occur of: (1) December 31, 2009 (the “Stated Maturity Date”), (2) the date that
is thirty-one (31) calendar days after the Borrower receives any settlement
proceeds, recovery or judgment proceeds arising out of Cause No. 2006-01984,
MOSH Holding, L.P. et al. (the “Plaintiffs and the Intervenors”) v. Pioneer
Natural Resources Company; Pioneer Natural Resources USA, Inc., Woodside Energy
(USA), Inc., and JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore
Trust, filed in the 334th District Court of Harris County, Texas (the
“Lawsuit”), (3) the final liquidation of the Borrower’s assets or the assets of
the Partnership, (4) except for the liens securing this Note or any contingent
fee agreement with an attorney, the Borrower grants or permits to exist any
mortgage, pledge or security interest in, or other encumbrance on, its assets
without the prior written consent of the Lender, and (5) the acceleration of the
maturity of this Note by the Lender as a result of the existence of an Event of
Default.  If either (1) an Event of Default exists or (2) the Maturity Date has
occurred, the Lender shall have no further obligation to advance any additional
Loans to the Borrower hereunder.

 

In the event that the Lawsuit has not been resolved by settlement or final
adjudication by December 31, 2009, and neither (1) an Event of Default exists
nor (2) none of the events referred to in clauses (2) through (6) of the
definition of Maturity Date has occurred, the Borrower may request an extension
of the Stated Maturity Date.

 

In the event the maturity of this Note may be brought about (whether by
acceleration or otherwise) and it is placed in the hands of an attorney for
collection, or is collected through probate, bankruptcy or other proceedings,
the Borrower promises to pay all reasonable amounts actually incurred by the
Lender for court costs and attorneys’ fees in connection therewith.

 

The Borrower waives grace, notice, demand, presentment for payment, notice of
non-payment, protest, notice of protest, notice of intention to accelerate the
indebtedness due hereunder and all other notice, filing of suit and diligence in
collecting this Note, and the enforcing of any of the security rights of the
Lender, and consents and agrees that the time of payment hereof may be extended
without notice at any time and from time to time, and for

 

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periods of time, whether or not for a term or terms in excess of the original
term hereof, without notice or consideration to, or consent from, the Borrower. 
Time is of the essence hereof.

 

The indebtedness evidenced by this Note, as an amendment, restatement,  renewal
and extension of the Original Note, and is secured by a pledge of the Trust
Estate, as that term is defined in the Trust Indenture, including, without
limitation, the 99.99% general partnership interest in the Mesa Offshore Royalty
Partnership owned by the Mesa Offshore Trust, pursuant to that one certain
pledge agreement dated June 25, 2008, executed by the Borrower for the benefit
of the Lender, as amended by the Second Amendment to Pledge Agreement dated the
date hereof.

 

This Note is not assignable or transferable.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

 

EXECUTED by the parties hereto as of the date first written above.

 

 

 

MESA OFFSHORE TRUST,

 

a Texas trust

 

 

 

By: The Bank of New York Trust Company, N. A.
as attorney-in-fact for JPMORGAN CHASE
BANK, N.A. Trustee

 

 

 

 

 

By:

  /s/ MIKE ULRICH

 

Name:

Mike Ulrich

 

Title:

Vice President

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

a national banking association

 

 

 

 

 

 

 

By:

  /s/ DAVID A. WEISBROD

 

Name:

David A. Weisbrod

 

Title:

Managing Director

 

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LOANS AND PAYMENTS OF PRINCIPAL

 

Date

 

Amount of Loan

 

Amount of
Principal Paid
or Prepaid

 

Unpaid
Principal
Balance

 

Notation Made
By

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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