FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT
Exhibit
10.3
FIRST
AMENDMENT TO
SECOND
AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT
THIS
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT
(herein called this “Amendment”)
is
made as of the 29th day of June, 2005, by and among ▇▇▇▇▇▇▇ OIL & GAS, L.P.,
a Delaware limited partnership (the “Borrower”),
▇▇▇▇▇▇▇ EXPLORATION COMPANY, a Delaware corporation (“▇▇▇▇▇▇▇
Exploration”),
▇▇▇▇▇▇▇, INC., a Nevada corporation (the “General
Partner”),
the
lenders party to the Agreement from time to time (the “Lenders”),
and
THE ROYAL BANK OF SCOTLAND plc, as Agent (in such capacity, the “Agent”).
W
I T N E S S E T H:
WHEREAS,
Borrower, ▇▇▇▇▇▇▇ Exploration and General Partner (collectively, the
“Credit
Parties”),
Agent, and Lenders have entered into that certain Second Amended and Restated
Subordinated Credit Agreement dated as of January 21, 2005 (the “Original
Agreement”),
for
the purposes and consideration therein expressed, pursuant to which Lenders
made
and became obligated to make loans to Borrower, which loans are unconditionally
and irrevocably guaranteed by ▇▇▇▇▇▇▇ Exploration and General Partner
(collectively, the “Guarantors”),
all
as therein provided;
WHEREAS,
Credit Parties, Agent, and Lenders desire to amend the Original Agreement
for
the purposes described herein;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and in the Original Agreement, in consideration
of
the loans which may hereafter be made by Lenders to Borrower, and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE
I.
DEFINITIONS
AND REFERENCES
Section
1.1.
Defined
Terms.
Unless
the context otherwise requires or unless otherwise expressly defined herein,
the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment. As used herein, the following terms shall have the
following meanings:
“Credit
Agreement”
means
the Original Agreement as amended by this Amendment.
ARTICLE
II.
AMENDMENTS
Section
2.1.
Definitions.
(a)
The
definitions of “Commitment”,
“Commitment
Termination Date”,
“Margin”,
“Maturity
Date”,
and
“Senior
Credit Agreement”
contained in Section 1.01 of the Original Agreement are hereby deleted
in
their entirety and replaced by the following:
“Commitment”
means,
for any Lender, the amount set opposite such Lender's name on Schedule 1
as its
“Commitment”, or if such Lender has entered into any Assignment and Acceptance,
as set forth for such Lender as its Commitment in the Register maintained
by the
Agent pursuant to Section
10.06(c),
as such
amount may be reduced or terminated pursuant to Section
2.04
or
Article
VII
or
otherwise under this Agreement. The aggregate amount of the Commitments is
$40,000,000.
“Commitment
Termination Date”
means
the earlier of (a) December 29, 2006 and (b) the earlier termination in whole
of
the Commitments pursuant to Section
2.04
or
Article
VII
or
otherwise under this Agreement.
“Margin”
means,
as of any date of determination, the applicable percentage set forth below,
determined as a function of the Senior Utilization Percentage and the aggregate
outstanding principal amounts on such date (“Outstanding
Advances”):
|
Senior
Utilization
Percentage
|
Outstanding
Advances
≤
$30,000,000
|
Outstanding
Advances
>
$30,000,000
and ≤
$35,000,000
|
Outstanding
Advances
>
$35,000,000
|
|
≥
90%
|
3.90%
|
4.25%
|
4.50%
|
|
≥
75% and <90%
|
3.90%
|
4.25%
|
4.50%
|
|
≥
50% and <75%
|
3.90%
|
3.90%
|
3.90%
|
|
<
50%
|
3.90%
|
3.90%
|
3.90%
|
“Maturity
Date”
means
June 29, 2010.
“Senior
Credit Agreement”
means
the Fourth Amended and Restated Credit Agreement dated as of June 29, 2005,
among the Borrower, ▇▇▇▇▇▇▇ Exploration, the General Partner, the lenders
party
thereto from time to time (the “Senior
Lenders”),
Bank
of America, N.A., as administrative agent for the senior lenders (the
“Senior
Agent”)
and as
issuing lender for the Senior Lenders (the “Issuing
Lender”),
Banc
of America Securities LLC, as lead arranger, The Royal Bank of Scotland plc,
as
co-arranger and as documentation agent (the “Documentation
Agent”),
and
BNP Paribas, as co-arranger (in such capacity together with the Royal Bank
of
Scotland plc in such capacity, the “Co-Arrangers”)
and as
Syndication Agent (the “Syndication
Agent”).
2
(b)
Clause
(j) of the definition of “Debt”,
contained in Section 1.01
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
“(j)
any
obligations in connection with any volumetric production payments;”
(c)
Clause
(c) of the definition of “NPV”, contained in Section 1.01 of the Original
Agreement is hereby deleted in its entirety and replaced by the
following:
“(c)
the
pricing assumptions used in determining NPV for any particular reserves shall
be
based upon the following price decks: (i) for natural gas, the Gas Strip
Price,
provided that if any Gas Strip Price is greater than $4.50 per MMBtu, the
price
shall be capped at $4.50 per MMBtu, and (ii) for crude oil, the Oil Strip
Price,
provided that if any Oil Strip Price is greater than $30 per barrel, the
price
shall be capped at $30 per barrel, and”
(d)
The
following definitions are hereby added to Section
1.01
of the
Original Agreement:
“First
Amendment”
means
the First Amendment to Second Amended and Restated Subordinated Credit Agreement
dated as of June 29, 2005, among the Borrower, ▇▇▇▇▇▇▇ Exploration, the General
Partner, the Lenders and the Agent.
“First
Amendment Effective Date”
means
the first Business Day after all conditions to effectiveness set forth in
Section
3.1
of the
First Amendment have been satisfied in accordance with the terms
thereof.
“Notice
of Borrowing”
means a
notice of borrowing in the form attached as Exhibit
A
to the
First Amendment.
“Senior
Utilization Percentage”
means
the “Utilization Percentage” as defined and in effect at the time in question
under the Senior Credit Agreement.
“Unused
Subordinated Commitment Amount”
means,
with respect to a Lender at any time, such Lender’s Commitment at such time as
it may be reduced from time to time pursuant to Section
2.04
minus,
the aggregate outstanding principal amount of all Advances owed to such Lender
at such time.
(e)
The
definitions of “Augmenting
Lenders”,
“Increasing
Lender”,
“Incremental
Lenders”,
“Incremental
Commitment Amount”
are
hereby deleted from Section
1.01
of the
Original Agreement.
3
Section
2.2. Section
2.01(a)
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
“(a)
Advances.
Each
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to (i) make an Advance to the Borrower for a Borrowing in an
aggregate amount of $10,000,000 on the First Amendment Effective Date and
(ii)
make Advances to the Borrower from time to time during the period from the
date
of the First Amendment Effective Date until the Commitment Termination Date
in
an amount for each Lender not to exceed such Lender’s Unused Subordinated
Commitment Amount. Each Borrowing shall be in an aggregate amount not less
than
$5,000,000 and in integral multiples of $5,000,000 in excess thereof. Principal
payments made after the Closing Date may not be reborrowed. Each Notice of
Borrowing shall be irrevocable and binding on the Borrower.
Any
Advance made after the First Amendment Effective Date shall be made at least
three Business Days after a Notice of Borrowing is received by the Agent.”
Section
2.3. Section
2.01(c)
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
“Intentionally
Omitted.”
Section
2.4. Section
2.03
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
“Section
2.03. Method
of Borrowing.
(a) Each
Borrowing shall be made pursuant to a Notice of Borrowing (or by telephone
notice promptly confirmed in writing by a Notice of Borrowing), given not
later
than 12:00 p.m. (New York time) by the Borrower to the Agent in accordance
with
Section
2.01(a),
which
shall in turn give to each applicable Lender prompt notice of such proposed
Borrowing by telecopier or telex. Each Notice of a Borrowing shall be given
by
telecopier or telex, confirmed immediately in writing, specifying the
information required therein. In the case of a proposed Borrowing comprised
of
Eurodollar Rate Advances, the Agent shall promptly notify each applicable
Lender
of the applicable interest rate under Section
2.09(b).
Each
applicable Lender shall, before 2:00 p.m. (New York time) on the date of
such
Borrowing, make available for the account of its Applicable Lending Office
to
the Agent at its address referred to in Section
10.02,
or such
other location as the Agent may specify by notice to the Lenders, in same
day
funds, in the case of a Borrowing, such Lender’s Pro Rata Share of such
Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article
III,
the
Agent shall make such funds available to the Borrower at its account with
the
Agent.
(b)
Certain
Limitations.
Notwithstanding anything to the contrary contained in paragraph (a)
above:
(i)
if
any
Lender shall, at least one Business Day before the date of any requested
Borrowing, or continuation, notify the Agent that the introduction of or
any
change in or in the interpretation of any law or regulation makes it unlawful,
or that any central bank or other Governmental Authority asserts that it
is
unlawful, for such Lender or its Eurodollar Lending Office to perform its
obligations under this Agreement to make Eurodollar Rate Advances or to fund
or
maintain Eurodollar Rate Advances, the right of the Borrower to select
Eurodollar Rate Advances from such Lender shall be suspended until such Lender
shall notify the Agent that the circumstances causing such suspension no
longer
exist, and the Advance made by such Lender in respect of such Borrowing or
continuation shall be a Base Rate Advance;
4
(ii)
if
the
Agent is unable to determine the Eurodollar Rate for Eurodollar Rate Advances
comprising any requested Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or for any subsequent Borrowing
shall be suspended until the Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist, and each
Advance
comprising such Borrowing shall be a Base Rate Advance; and
(c)
Lender
Obligations Several.
The
obligations of the Lenders hereunder to make Advances and to make payments
pursuant to Section
10.04(c)
are
several and not joint. The failure of any Lender to make any Advance or to
make
any payment under Section
10.04(c)
on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for
the
failure of any other Lender to so make its Advance, to purchase its
participation or to make its payment under Section
10.04(c).
(d)
Failure
to Satisfy Conditions Precedent.
If any
Lender makes available to the Agent funds for any Advance to be made by such
Lender as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Agent because the conditions
to the applicable Borrowing set forth in Article
III
are not
satisfied or waived in accordance with the terms hereof, the Agent shall
return
such funds (in like funds as received from such Lender) to such Lender, without
interest.”
Section
2.5. Section
2.05
of the
Original Agreement is hereby amended by the following clause (e)
thereto:
“(e) Accrued
Interest.
Each
prepayment under this Section
2.05
shall be
accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section
2.10
as a
result of such prepayment.”
Section
2.6. Section
2.08
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
“Section
2.08 Fees.
(a)
Commitment
Fees.
The
Borrower agrees to pay to the Agent for the account of each Lender a commitment
fee at a per annum rate equal to 0.750% for commitment fees on the average
daily
Unused Subordinated Commitment Amount of such Lender, from the date of this
Agreement until the Commitment Termination Date. The commitment fees shall
be
due and payable quarterly in arrears on the last day of each March, June,
September, and December commencing on September 30, 2005 and continuing
thereafter through and including the Commitment Termination Date.
5
(b)
Advance
Fees.
The
Borrower agrees to pay to the Agent for the account of the Lenders in connection
with any Advances hereunder, a fee in an amount equal to 0.50% multiplied
by the
amount of such Advance. Such fee shall be due and payable on the date of
any
Advance after the Advance on the First Amendment Effective Date.”
Section
2.7. Section
2.09(c) of the Original Agreement is hereby deleted in its entirety and replaced
by the following:
“(c) Usury
Recapture.
(i)
If,
with
respect to any Lender, the effective rate of interest contracted for under
the
Subordinated Loan Documents, including the stated rates of interest and fees
contracted for hereunder and any other amounts contracted for under the
Subordinated Loan Documents which are deemed to be interest, at any time
exceeds
the Maximum Rate, then the outstanding principal amount of the loans made
by
such Lender hereunder shall bear interest at a rate which would make the
effective rate of interest for such Lender under the Subordinated Loan Documents
equal the Maximum Rate until the difference between the amounts which would
have
been due at the stated rates and the amounts which were due at the Maximum
Rate
(the “Lost
Interest”)
has
been recaptured by such Lender.
(ii)
If,
when
the loans made hereunder are repaid in full, the Lost Interest has not been
fully recaptured by such Lender pursuant to the preceding subsection (i),
then,
to the extent permitted by law, for the loans made hereunder by such Lender
the
interest rates charged under this Section 2.09 shall be retroactively increased
such that the effective rate of interest under the Subordinated Loan Documents
was at the Maximum Rate since the effectiveness of this Agreement to the
extent
necessary to recapture the Lost Interest not recaptured pursuant to the
preceding sentence and, to the extent allowed by law, the Borrower shall
pay to
such Lender the amount of the Lost Interest remaining to be recaptured by
such
Lender.
(iii)
NOTWITHSTANDING
THE FOREGOING OR ANY OTHER TERM IN THIS AGREEMENT AND THE SUBORDINATED LOAN
DOCUMENTS TO THE CONTRARY, IT IS THE INTENTION OF EACH LENDER AND THE BORROWER
TO CONFORM STRICTLY TO ANY APPLICABLE USURY LAWS. ACCORDINGLY, IF ANY LENDER
CONTRACTS FOR, CHARGES, OR RECEIVES ANY CONSIDERATION WHICH CONSTITUTES INTEREST
IN EXCESS OF THE MAXIMUM RATE, THEN ANY SUCH EXCESS SHALL BE CANCELED
AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL AT SUCH LENDER’S OPTION BE APPLIED
TO THE OUTSTANDING AMOUNT OF THE ADVANCES MADE HEREUNDER BY SUCH LENDER OR
BE
REFUNDED TO THE BORROWER.”
6
Section
2.8. Section
3.01 of the Original Agreement is hereby amended by adding the following
new
clause (k) at the end of such Section:
“(k) Notice
of Borrowing.
The
Agent shall have received a Notice of Borrowing with the appropriate insertions
and executed by a duly authorized Responsible Officer of the General
Partner.”
Section
2.9. Section 5.06(g) of the Original Agreement is hereby deleted in its entirety
and replaced by the following:
“(g) Annual
Capital Expenditures Budget.
As soon
as available and in any event prior to February 28, a one-year capital
expenditure projection for ▇▇▇▇▇▇▇ Exploration and its Subsidiaries in form
and
substance acceptable to the Agent for the following fiscal year;”
Section
2.10. Section 5.06(k) of the Original Agreement is hereby deleted in its
entirety and replaced by the following:
“(k) Securities
Law Filings and other Public Information.
Promptly, upon its becoming available, each financial statement, notice,
proxy
material, reports and other information which any Credit Party sends to the
holders of its respective public securities generally, files with the SEC
(excluding routine correspondence and drafts of proposed filings, such as
registration statements), or otherwise makes available to the public or the
financial community generally;”
Section
2.11. Sections 5.15(a) and 5.15(b) of the Original Agreement are hereby deleted
in their entirety and replaced by the following:
“(a)
The
Borrower shall deliver to the Agent and each of the Lenders on or before
each
April 1, beginning April 1, 2006, an Independent Engineering Report dated
effective as of the immediately preceding December 31, together with such
other
reports, data and supplemental information as may be reasonably requested
by the
Agent with respect to the Oil and Gas Properties included or to be included
in
the calculation of Total NPV hereunder.
(b)
The
Borrower shall deliver to the Agent and each Lender on or before each October
1,
beginning October 1, 2005, an Internal Engineering Report dated effective
as of
the immediately preceding June 30, together with such other reports, data
and
supplemental information as may be reasonably requested by the Agent with
respect to the Oil and Gas Properties included or to be included in the
calculation of Total NPV hereunder.”
Section
2.12. Section
6.18
of the
Original Agreement is hereby deleted in its entirety and replaced by the
following:
7
“Section
6.18 Current
Ratio.
▇▇▇▇▇▇▇
Exploration shall not permit the ratio of (a) its consolidated current assets
of
▇▇▇▇▇▇▇ Exploration and its consolidated Subsidiaries to (b) their consolidated
current liabilities to be less than 1.00 to 1.00 at any time. For purposes
of
this Agreement, “consolidated current assets” and “consolidated current
liabilities” shall be determined in accordance with GAAP, except that (x)
consolidated current assets and consolidated current liabilities will be
calculated without including any amounts resulting from the application of
FASB
Statements 133 or 143, (y) the Unused Commitment Amount (as defined in the
Senior Credit Agreement) and the Unused Subordinated Commitment Amount shall
be
treated as a consolidated current assets, and (z) the consolidated current
liabilities will exclude current maturities of long-term debt.”
Section
2.13. Section
10.04 of the Original Agreement is hereby deleted in its entirety and replaced
by the following:
“Section
10.04 Expenses;
Indemnity; Damage Waiver.
(a)
Costs
and Expenses.
The
Borrower shall pay (i) all reasonable out of pocket expenses incurred by
the
Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Agent), in connection with the preparation,
negotiation, execution, delivery and administration of this Agreement and
the
other Subordinated Loan Documents or any amendments, modifications or waivers
of
the provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all out of pocket expenses
incurred by the Agent or any Lender (including the fees, charges and
disbursements of any counsel for the Agent or any Lender), and shall pay
all
fees and time charges for attorneys who may be employees of the Agent or
any
Lender, in connection with the enforcement or protection of its rights (A)
in
connection with this Agreement and the other Subordinated Loan Documents,
including its rights under this Section, or (B) in connection with the Advances
made, including all such out of pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Advances.
(b)
Indemnification
by the Borrower.
The
Borrower shall indemnify the Agent (and any sub-agent thereof) and each Lender,
and each Related Party of any of the foregoing Persons (each such Person
being
called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and
hold
harmless each Indemnitee from all fees and time charges and disbursements
for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
or
asserted against any Indemnitee by any third party or by the Borrower or
any
other Credit Party arising out of, in connection with, or as a result of
(i) the
execution or delivery of this Agreement, any other Subordinated Loan Document
or
any agreement or instrument contemplated hereby or thereby, the performance
by
the parties hereto of their respective obligations hereunder or thereunder
or
the consummation of the transactions contemplated hereby or thereby, (ii)
any
Advance or the use or proposed use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract,
tort
or any other theory, whether brought by a third party or by the Borrower
or any
other Credit Party, and regardless of whether any Indemnitee is a party thereto,
in all cases, whether or not caused by or arising, in whole or in part, out
of
the negligence of the Indemnitee; provided that such indemnity shall not,
as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross
negligence or willful misconduct of such Indemnitee or (y) result from a
claim
brought by the Borrower or any other Credit Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Subordinated Loan Document, if the Borrower or such Credit Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.
8
(c)
Reimbursement
by Lenders.
To the
extent that the Borrower for any reason fails to indefeasibly pay any amount
required under subsection (a) or (b) of this Section to be paid by it to
the
Agent (or any sub-agent thereof) or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Agent (or any such sub-agent)
or such
Related Party, as the case may be, such Lender’s Pro Rata Share (determined as
of the time that the applicable unreimbursed expense or indemnity payment
is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case
may
be, was incurred by or asserted against the Agent (or any such sub-agent)
or
against any Related Party of any of the foregoing acting for the Agent (or
any
such sub-agent) in connection with such capacity. The obligations of the
Lenders
under this subsection (c) are subject to the provisions of Section
2.03(e).
(d)
Waiver
of Consequential Damages, Etc.
To the
fullest extent permitted by applicable law, the Borrower shall not assert,
and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for
special, indirect, consequential or punitive damages (as opposed to direct
or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Subordinated Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any
Advance or the use of the proceeds thereof. No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use
by
unintended recipients of any information or other materials distributed by
it
through telecommunications, electronic or other information transmission
systems
in connection with this Agreement or the other Subordinated Loan Documents
or
the transactions contemplated hereby or thereby.
(e)
Payments.
All
amounts due under this Section shall be payable not later than ten Business
Days
after demand therefor.
9
(f)
Survival.
The
agreements in this Section shall survive the resignation of the Agent, the
replacement of any Lender, the termination of the aggregate Commitments and
the
repayment, satisfaction or discharge of all the other Subordinated
Obligations.”
Section
2.14. Section
10.06 of the Original Agreement is hereby amended by adding the following
clauses (h) and (i) to the end of such Section:
(h)
Certain
Pledges.
Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Subordinated
Note, if any) to secure obligations of such Lender, including any pledge
or
assignment to secure obligations to a Federal Reserve Bank; provided that
no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a
party
hereto.
(i)
Special
Purpose Funding Vehicles.
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting
Lender”)
may
grant to a special purpose funding vehicle identified as such in writing
from
time to time by the Granting Lender to the Agent and the Borrower (an
“SPC”)
the
option to provide all or any part of any Advance that such Granting Lender
would
otherwise be obligated to make pursuant to this Agreement; provided that
(i)
nothing herein shall constitute a commitment by any SPC to fund any Advance,
and
(ii) if an SPC elects not to exercise such option or otherwise fails to make
all
or any part of such Advance, the Granting Lender shall be obligated to make
such
Committed Loan pursuant to the terms hereof or, if it fails to do so, to
make
such payment to the Agent as is required under Section 2.10(b)(ii). Each
party
hereto hereby agrees that (i) neither the grant to any SPC nor the exercise
by
any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrower under this Agreement
(including its obligations under Sections 2.13 and 2.14), (ii) no SPC shall
be
liable for any indemnity or similar payment obligation under this Agreement
for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Subordinated Loan Document, remain the lender of
record
hereunder. The making of an Advance by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Advance
were made by such Granting Lender. In furtherance of the foregoing, each
party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt
of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency,
or
liquidation proceeding under the laws of the United States or any State thereof.
Notwithstanding anything to the contrary contained herein, any SPC may (i)
with
notice to, but without prior consent of the Borrower and the Agent and with
the
payment of a processing fee of $3500, assign all or any portion of its right
to
receive payment with respect to any Advance to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Advances to any rating agency, commercial paper dealer or provider
of
any surety or Guarantee or credit or liquidity enhancement to such
SPC.”
10
Section
2.15. Article
X
of the
Original Agreement is hereby amended by adding the following Section 10.11and
10.12:
“Section
10.11 Payments
Set Aside.
To the
extent that any payment by or on behalf of the Borrower is made to the Agent
or
any Lender, or the Agent or any Lender exercises its right of setoff, and
such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Agent or such Lender
in its discretion) to be repaid to a trustee, receiver or any other party,
in
connection with any proceeding under any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors’ rights generally
and by general principles of equity or otherwise, then (a) to the extent
of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment
had
not been made or such setoff had not occurred, and (b) each Lender severally
agrees to pay to the Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Agent, plus
interest thereon from the date of such demand to the date such payment is
made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.
The obligations of the Lenders under clause (b) of the preceding sentence
shall
survive the payment in full of the Subordinated Obligations and the termination
of this Agreement
Section
10.12 USA
PATRIOT Act Notice.
Each
Lender that is subject to the Act (as hereinafter defined) and the Agent
(for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56
(signed into law October 26, 2001)) (the “Act”),
it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or the Agent, as applicable, to identify
the Borrower in accordance with the Act.
Section
2.16. Schedule
1
to the
Original Agreement is hereby deleted in its entirety and replaced by
Schedule
1
attached
to this Amendment.
ARTICLE
III.
CONDITIONS
TO EFFECTIVENESS OF THE AMENDMENT
Section
3.1.
Effective
Date.
This
Amendment shall become effective as of the date first above written when
Agent
shall have received all of the following:
(a)
this
Amendment, duly authorized, executed and delivered by the Credit Parties,
Agent,
and each Lender, and in form and substance satisfactory to Agent;
(b)
an
Amended and Restated Subordinated Note payable to the order of each Lender
in
the amount of its Commitment;
11
(c)
a
favorable opinion dated as of the date of this Amendment of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., counsel to the Credit Parties, in form and substance satisfactory
to the Agent covering such matters as any Lender through the Agent may
reasonably request;
(d)
copies
of
all amendments to the Senior Loan Documents and the Intercreditor and
Subordination Agreement required to permit the execution, delivery and
performance of the Credit Agreement, in form and substance satisfactory to
Agent;
(e)
copies,
certified as of the date of this Agreement by a Responsible Officer or the
secretary or an assistant secretary of the Borrower of (A) the resolutions
of
the applicable governing body of the Borrower approving this Amendment, (B)
the
organizational documents of the Borrower (to the extent the same have changed
since copies thereof were delivered in connection with the Original Agreement),
and (C) all other documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment;
(f)
certificates
of a Responsible Officer or the secretary or an assistant secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Amendment;
(g)
copies,
certified as of the date of this Agreement by a Responsible Officer or the
secretary or an assistant secretary of each Guarantor of (A) the resolutions
of
the applicable governing body of such Guarantor approving the Amendment,
(B) the
organizational documents of such Guarantor (to the extent the same have changed
since copies thereof were delivered in connection with the Original Agreement),
and (C) all other documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment;
(h)
a
certificate of the secretary or an assistant secretary of each Guarantor
certifying the names and true signatures of officers of such Guarantor
authorized to sign this Amendment, the Security Instruments and the other
Loan
Documents to which such Guarantor is a party;
(i)
payment
of the reasonable fees and disbursements of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP relating to
this Amendment as provided in Section 10.04 of the Credit Agreement (provided
that if such fees and disbursements have not been invoiced to the Borrower
at
least one day prior to the delivery of this Amendment, such payment will
not be
a condition to the effectiveness hereof and the Borrower will pay such fees
and
disbursements promptly after receipt of such an invoice);
(j) the
pay
to the Agent of the fees described the letter dated June 29, 2005 among the
Borrower and the Agent; and
(k)
such
other documents as Agent may reasonably request.
12
ARTICLE
IV.
MISCELLANEOUS
Section
4.1. Ratification
of Agreements.
The
Original Agreement as hereby amended is hereby ratified and confirmed in
all
respects. Without in any way modifying or limiting the foregoing, each of
the
undersigned Guarantors hereby (a) consents to the provisions of this
Amendment and the transactions contemplated herein, and (b) ratifies
and
confirms its guaranty obligations made by it in favor of Agent for the benefit
of each Lender pursuant to and in accordance with Article VIII of the Credit
Agreement, and agrees that its obligations and covenants thereunder are
unimpaired hereby and shall remain in full force and effect. Any reference
to
the Credit Agreement in any Subordinated Loan Document shall be deemed to
be a
reference to the Original Agreement as hereby amended. The Subordinated Loan
Documents, as they may be amended or affected by this Amendment, are hereby
ratified and confirmed in all respects. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of Lenders under the Credit
Agreement, the Subordinated Note, or any other Subordinated Loan Document
nor
constitute a waiver of any provision of the Credit Agreement, the Subordinated
Note, or any other Subordinated Loan Document.
Section
4.2. Survival
of Agreements.
All
representations, warranties, covenants and agreements of the Credit Parties
herein shall survive the execution and delivery of this Amendment and the
performance hereof, including without limitation the making, granting or
maintenance of the Advances, and shall further survive until all of the
Subordinated Obligations are paid in full. All statements and agreements
contained in any certificate or instrument delivered by any Credit Party
hereunder or under the Credit Agreement to any Lender shall be deemed to
constitute representations and warranties by, and/or agreements and covenants
of, such Credit Party under this Amendment and under the Credit Agreement.
Section
4.3. Subordinated
Loan Documents.
This
Amendment is a Subordinated Loan Document, and all provisions in the Credit
Agreement pertaining to Subordinated Loan Documents apply hereto.
Section
4.4. GOVERNING
LAW.
THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH,
THE LAWS OF THE STATE OF NEW YORK.
Section
4.5. Counterparts.
This
Amendment may be separately executed in counterparts and by the different
parties hereto in separate counterparts, each of which when so executed shall
be
deemed to constitute one and the same Amendment.
THIS
AMENDMENT AND THE OTHER SUBORDINATED LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
13
[Signatures
on Following Page]
14
| ▇▇▇▇▇▇▇ OIL & GAS, L.P. | |||
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
|
|||
|
Executive
Vice President &
|
|||
|
Chief
Financial Officer
|
|||
| ▇▇▇▇▇▇▇ EXPLORATION COMPANY | |||
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
|
|||
|
Executive
Vice President &
|
|||
|
Chief
Financial Officer
|
|||
| ▇▇▇▇▇▇▇, INC. | |||
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
|
|||
|
Executive
Vice President &
|
|||
|
Chief
Financial Officer
|
|||
| THE ROYAL BANK OF SCOTLAND plc, | |||
| as Agent and Lender | |||
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
|
Senior
Vice President
|
|||
15
EXHIBIT
A
NOTICE
OF BORROWING
[Date]
The
Royal
Bank of Scotland plc, as Agent
▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
___________________
Ladies
and Gentlemen:
The
undersigned, ▇▇▇▇▇▇▇ Oil & Gas, L.P., a Delaware limited partnership
(“Borrower”),
refers to the Second Amended and Restated Credit Agreement dated as of January
21, 2005, as amended by the First Amendment to Second Amended and Restated
Credit Agreement dated as of June 29, 2005 (as the same may be amended or
modified from time-to-time, the “Credit
Agreement,”
the
defined terms of which are used in this Notice of Borrowing unless otherwise
defined in this Notice of Borrowing) among the Borrower, ▇▇▇▇▇▇▇ Exploration
Company, a Delaware corporation, ▇▇▇▇▇▇▇, Inc., a Nevada corporation, the
lenders party thereto (the “Lenders”),
and
The Royal Bank of Scotland plc, as agent (the “Agent”),
and
hereby gives you irrevocable notice pursuant to Section
2.03(a)
of the
Credit Agreement that the undersigned hereby requests a Borrowing, and in
connection with that request sets forth below the information relating to
such
Borrowing (the “Proposed
Borrowing”)
as
required by Section
2.03(a)
of the
Credit Agreement:
|
(a)
|
The
Business Day of the Proposed Borrowing is _____________,
_____.
|
|
(b)
|
The
aggregate amount of the Proposed Borrowing is
$____________.
|
The
Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Borrowing:
|
(i)
|
the
representations and warranties contained in Article
IV
of
the Credit Agreement and each of the other Subordinated Loan Documents
are
true and correct in all material respects, on and as of the date
of the
Proposed Borrowing, before and after giving effect to such Proposed
Borrowing and to the application of the proceeds therefrom, as
though made
on the date of the Proposed Borrowing (unless such representations
and
warranties are stated to relate to a specific earlier date, in
which case
such representations and warranties shall be true and correct in
all
material respects as of such earlier
date);
|
|
|
(ii)
|
no
Default has occurred and is continuing, or would result from such
Proposed
Borrowing or from the application of the proceeds therefrom;
and
|
|
(iii)
|
after
giving effect to such Proposed Borrowing, the Borrower is in compliance
with Sections
6.18,
6.19
and 6.22
of
the Credit Agreement.
|
|
Very
truly yours,
|
||||
| ▇▇▇▇▇▇▇ OIL & GAS, ▇.▇ | ||||
| ▇▇▇▇▇▇▇, Inc., its general partner | ||||
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
|
||||
|
Executive
Vice President &
|
||||
|
Chief
Financial Officer
|
||||
2