EXHIBIT 10.13

 

ELEVENTH AMENDMENT TO LOAN AGREEMENT

 

This ELEVENTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as
of March 8, 2017 (the “Eleventh Amendment Effective Date”), among MEXCO ENERGY
CORPORATION, FORMAN ENERGY CORPORATION, SOUTHWEST TEXAS DISPOSAL CORPORATION and
TBO OIL & GAS, LLC (collectively, “Borrowers” and each, individually, a
“Borrower”) and BANK OF AMERICA, N.A. (“Bank”).

 

WHEREAS, Borrowers and Bank are parties to that certain Loan Agreement dated as
of December 31, 2008, as amended by First Amendment to Loan Agreement dated as
of December 28, 2009, Second Amendment to Loan Agreement dated as of March 1,
2010, Third Amendment to Loan Agreement dated as of September 30, 2010, Fourth
Amendment to Loan Agreement dated as of October 22, 2010, Fifth Amendment to
Loan Agreement dated as of December 28, 2011, Sixth Amendment to Loan Agreement
dated as of October 22, 2012, Seventh Amendment to Loan Agreement dated as of
October 25, 2013, Eighth Amendment to Loan Agreement dated as of September 10,
2014, Ninth Amendment to Loan Agreement dated as of February 13, 2015, and Tenth
Amendment to Loan Agreement dated as of March 31, 2016 (as so amended, the “Loan
Agreement”);

 

WHEREAS, Borrowers have requested that Bank amend the Loan Agreement as
hereinafter provided;

 

WHEREAS, Mexco Energy Corporation (“Mexco”) desires to sell its interest in
Section 14, T-9-N, R-6-W, Grady County, Oklahoma, and Section 18, T-11-N, R-8-W,
Canadian County, Oklahoma (collectively, the “Subject Sales”), which are not
permitted under Section 7.11(e) of the Loan Agreement unless Bank consents
thereto;

 

WHEREAS, Borrowers have requested that Bank consent to the Subject Sales;

 

WHEREAS, subject to the terms and conditions set forth herein, Bank is willing
to agree to such amendments and to consent to the Subject Sales (the “Consent”);
and

 

WHEREAS, Borrowers and Bank acknowledge that the terms of this Amendment
constitute an amendment and modification of, and not a novation of, the Loan
Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1. Definitions. Unless otherwise defined in this Amendment, terms used
in this Amendment that are defined in the Loan Agreement shall have the meanings
assigned to such terms in the Loan Agreement.

 

SECTION 2. Amendments to the Loan Agreement. Subject to satisfaction of the
conditions of effectiveness set forth in Section 3 of this Amendment, the
parties hereto agree that:

 

(a) The last sentence of Section 1.3(d)(ii)(B) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

 

Together with such mortgages and deeds of trust, Borrowers shall deliver to Bank
title opinions and/or other title information and data acceptable to Bank such
that Bank shall have received, together with the title information previously
delivered to Bank, acceptable title information regarding the proved developed
producing and proved developed non-producing oil and gas properties of Borrowers
that are evaluated in the most recent engineering report delivered to Bank and
are subject to a lien in favor of Bank that in the aggregate represent not less
than a PV9 value using Bank’s then current price deck (the “PV9 Value”) of 150%
of the Borrowing Base then in effect.

 

  

   

 

(b) Section 7.21 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:

 

7.21 Mortgage and Title Requirements

 

  (a) To secure full the and complete payment and performance of the
indebtedness hereunder, Borrowers shall grant a first priority lien (subject to
liens permitted hereunder) against the oil and gas properties of Borrower to the
extent set forth below pursuant to terms of one or more mortgages or deeds of
trust. Borrowers covenant that the aggregate PV9 Value of all proved developed
producing and proved developed non-producing oil and gas properties of Borrowers
that are evaluated in the most recent engineering report delivered to Bank and
are subject to a lien in favor of Bank shall at all times be not less than 150%
of the Borrowing Base in effect from time to time. Within thirty (30) days (or
such longer time as determined by Bank) after Bank advises Borrowers of the
failure to so achieve such percentage and the percentage shortfall thereof,
Borrowers shall execute such mortgages or deeds of trust covering additional oil
and gas properties sufficient to cover such shortfall.         (b) Without
limitation of any other requirements contained in this Agreement, Borrowers
shall, upon request by Bank, deliver to Bank title opinions and/or other title
information and data acceptable to Bank regarding the proved developed producing
and proved developed non-producing oil and gas properties of Borrowers that are
evaluated in the most recent engineering report delivered to Bank and are
subject to a lien in favor of Bank that in the aggregate represent not less than
a PV9 Value of 150% of the Borrowing Base then in effect.

 

SECTION 3. Conditions of Effectiveness. The amendments set forth in Section 2 of
this Amendment, as well as any other terms and conditions set forth herein,
shall be effective as of date first above written, provided that Bank shall have
received the following, which, in each case, shall be in form and substance
satisfactory to Bank:

 

(a) a counterpart of this Amendment executed by each Borrower and Bank;

 

(b) all fees and expenses required to be paid pursuant to the Loan Agreement,
including, without limitation, the fees and expenses of Winstead PC; and

 

(c) such other certificates, documents, consents or opinions as Bank reasonably
may require.

 

SECTION 4. Limited Consent. Subject to the terms and conditions hereof and upon
satisfaction of the conditions set forth in Section 3, Bank hereby agrees to the
Consent. Except as expressly stated herein, the Consent shall not be construed
as a consent to or waiver of any default, event of default or breach which may
now exist or hereafter occur or any violation of any term, covenant or provision
of the Loan Agreement or any other document executed in connection therewith.
All rights and remedies of Bank are hereby expressly reserved with respect to
any such default, event of default or breach. The Consent does not affect or
diminish the right of Bank to require strict performance by Borrower or each
other guarantor of each provision of the Loan Agreement and each other document
executed in connection therewith to which it is a party, except as expressly
provided herein, and shall not be construed as a course of dealing between Bank
and any Borrower or guarantor. All terms and provisions of, and all rights and
remedies of Bank under, the Loan Agreement and each other document executed in
connection therewith shall continue in full force and effect and are hereby
confirmed and ratified in all respects.

 

SECTION 5. Acknowledgment and Ratification. As a material inducement to Bank to
execute and deliver this Amendment, each Borrower acknowledges and agrees that
the execution, delivery, and performance of this Amendment shall, except as
expressly provided herein, in no way release, diminish, impair, reduce, or
otherwise affect the obligations of any Borrower under the Loan Agreement and
each other document executed in connection therewith, which documents shall
remain in full force and effect.

 

SECTION 6. Borrowers’ Representations and Warranties. As a material inducement
to Bank to execute and deliver this Amendment, each Borrower represents and
warrants to Bank (with the knowledge and intent that Bank is relying upon the
same in entering into this Amendment) that, as of the date of its execution of
this Amendment:

 

(a) This Amendment, the Loan Agreement and each of the other documents executed
in connection therewith to which such Borrower is a party, have each been duly
executed and delivered by such Borrower’s duly authorized officers and
constitute the valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy and insolvency laws
and by general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity).

 

  

   

 

(b) The representations and warranties set forth in Section 6 of the Loan
Agreement are true and correct in all material respects, after giving effect to
this Amendment, as if made on and as of the Eleventh Amendment Effective Date
(except to the extent such representations and warranties relate solely to an
earlier date, in which case, they are true and correct in all material respects
as of such date).

 

(c) At the time of and after giving effect to this Amendment, no default or
event of default under the Loan Agreement exists.

 

(d) The execution, delivery and performance of this Amendment are within such
Borrower’s corporate or limited liability company power, as the case may be,
have been duly authorized, are not in contravention of any law applicable to
such Borrower or the terms of such Borrower’s organizational documents and,
except as have been previously obtained, do not require the consent or approval
of any governmental authority or any other person or entity except to the extent
that such consent or approval is not material to the transactions contemplated
by this Amendment.

 

SECTION 7. Bank Makes No Representations or Warranties. By execution of this
Amendment, Bank does not (a) make any representation or warranty or assume any
responsibility with respect to any statements, warranties, or representations
made in or in connection with this Amendment, the Loan Agreement or the other
documents executed in connection therewith or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Amendment, the Loan
Agreement, the other documents executed in connection therewith, or (b) make any
representation or warranty or assume any responsibility with respect to the
financial condition of any Borrower or any other person or entity or the
performance or observance by such person or entity of any of their obligations
under the Loan Agreement or the other documents executed in connection
therewith.

 

SECTION 8. Effect of Amendment. This Amendment, except as expressly provided
herein, (a) shall not be deemed to be a consent to the modification or a waiver
of any other term or condition of the Loan Agreement or any other document
executed in connection therewith, (b) shall not prejudice any right or rights
which Bank may now or hereafter have under or in connection with the Loan
Agreement or any other document executed in connection therewith, and (c) shall
not be deemed to be a waiver of any existing or future default or event of
default under the Loan Agreement or any other document executed in connection
therewith.

 

SECTION 9. Release. As a material part of the consideration for Bank entering
into this Amendment, each Borrower (collectively “Releasor”) agrees as follows
(the “Release Provision”):

 

(a) RELEASOR HEREBY RELEASES AND FOREVER DISCHARGES BANK AND ITS PREDECESSORS,
SUCCESSORS, ASSIGNS, OFFICERS, MANAGERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES,
AGENTS, ATTORNEYS, REPRESENTATIVES, PARENT CORPORATIONS, SUBSIDIARIES, AND
AFFILIATES (HEREINAFTER ALL OF THE ABOVE COLLECTIVELY REFERRED TO AS “RELEASED
PARTIES”) JOINTLY AND SEVERALLY FROM ANY AND ALL CLAIMS, COUNTERCLAIMS, DEMANDS,
DAMAGES, DEBTS, AGREEMENTS, COVENANTS, SUITS, CONTRACTS, OBLIGATIONS,
LIABILITIES, ACCOUNTS, OFFSETS, RIGHTS, ACTIONS, AND CAUSES OF ACTION OF ANY
NATURE WHATSOEVER OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING, WITHOUT
LIMITATION, ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION FOR CONTRIBUTION AND
INDEMNITY, WHETHER ARISING AT LAW OR IN EQUITY, PRESENTLY POSSESSED, WHETHER
KNOWN OR UNKNOWN, WHETHER LIABILITY BE DIRECT OR INDIRECT, LIQUIDATED OR
UNLIQUIDATED, PRESENTLY ACCRUED, WHETHER ABSOLUTE OR CONTINGENT, FORESEEN OR
UNFORESEEN, AND WHETHER OR NOT HERETOFORE ASSERTED (“CLAIMS”), WHICH RELEASOR
MAY HAVE OR CLAIM TO HAVE AGAINST ANY RELEASED PARTIES.

 

(b) Releasor agrees not to sue any Released Parties or in any way assist any
other person or entity in suing any Released Parties with respect to any Claim
released herein. The Release Provision may be pleaded as a full and complete
defense to, and may be used as the basis for an injunction against, any action,
suit, or other proceeding which may be instituted, prosecuted, or attempted in
breach of the release contained herein.

 

  

   

 

(c) Releasor acknowledges, warrants, and represents to Released Parties that:

 

(i) Releasor has read and understands the effect of the Release Provision.
Releasor has had the assistance of independent counsel of its own choice, or has
had the opportunity to retain such independent counsel, in reviewing,
discussing, and considering all the terms of the Release Provision; and if
counsel was retained, counsel for Releasor has read and considered the Release
Provision and advised Releasor to execute the same. Before execution of this
Amendment, Releasor has had adequate opportunity to make whatever investigation
or inquiry it may deem necessary or desirable in connection with the subject
matter of the Release Provision.

 

(ii) Releasor is not acting in reliance on any representation, understanding, or
agreement not expressly set forth herein. Releasor acknowledges that Released
Parties have not made any representation with respect to the Release Provision
except as expressly set forth herein.

 

(ii) Releasor has executed this Amendment and the Release Provision thereof as
its free and voluntary act, without any duress, coercion, or undue influence
exerted by or on behalf of any person or entity.

 

(iii) Releasor is the sole owner of the Claims released by the Release
Provision, and Releasor has not heretofore conveyed or assigned any interest in
any such Claims to any other person or entity.

 

(d) Releasor understands that the Release Provision was a material consideration
in the agreement of Bank to enter into this Amendment.

 

(e) It is the express intent of Releasor that the release and discharge set
forth in the Release Provision be construed as broadly as possible in favor of
the Released Parties so as to foreclose forever the assertion by Releasor of any
claims released hereby against Released Parties.

 

(f) If any term, provision, covenant, or condition of the Release Provision is
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable, the remainder of the provisions shall remain in full force and
effect.

 

SECTION 10. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, EACH BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE LOAN
AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION THEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF BANK IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.

 

SECTION 11. Miscellaneous. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Texas. The captions in this Amendment
are for convenience of reference only and shall not define or limit the
provisions hereof. This Amendment may be executed in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In evidencing this Amendment, it shall
not be necessary to produce or account for more than one such counterpart. This
Amendment, and any documents required or requested to be delivered pursuant to
Section 3 hereof, may be delivered by facsimile or pdf transmission of the
relevant signature pages hereof and thereof, as applicable.

 

SECTION 12. Ratification. Each Borrower ratifies and acknowledges that the Loan
Agreement and each other document executed in connection therewith to which it
is a party are valid, subsisting and enforceable.

 

[Remainder of page intentionally left blank. Signature pages follow.]

 

  

   

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
date and year first above written.

 

  BORROWERS:       MEXCO ENERGY CORPORATION         By: /s/ Nicholas C. Taylor  
  Nicholas C. Taylor     Chairman of the Board and     Chief Executive Officer  
      FORMAN ENERGY CORPORATION         By: /s/ Nicholas C. Taylor     Nicholas
C. Taylor     Chairman of the Board and     Chief Executive Officer        
SOUTHWEST TEXAS DISPOSAL CORPORATION         By: /s/ Nicholas C. Taylor    
Nicholas C. Taylor     Chairman of the Board and     Chief Executive Officer    
    TBO OIL & GAS, LLC         By: /s/ Nicholas C. Taylor     Nicholas C. Taylor
    Chairman of the Board and     Chief Executive Officer

 

  BANK:       BANK OF AMERICA, N.A.         By: /s/ Edna Aguilar Mitchell    
Edna Aguilar Mitchell     Director