1
EXECUTION COPY
AMENDMENT NO. 9 TO AMENDED
AND RESTATED CREDIT AGREEMENT
AMENDMENT dated as of May 1, 1997 among AMERICAN EXPLORATION
COMPANY (the "Company"), the BANKS listed on the signature pages hereof (the
"Banks"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"),
and BANK OF MONTREAL, as Co-Agent (the "Co-Agent").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into an Amended
and Restated Credit Agreement dated as of December 21, 1994 with the banks
signatory thereto, the Agent and the Co-Agent, as amended by Amendment No. 1
dated as of February 16, 1995, Amendment No. 2 dated as of May 2, 1995,
Amendment No. 3 dated as of January 19, 1996, Amendment No. 4 dated as of June
5, 1996, Amendment No. 5 dated as of September 27, 1996, Amendment No. 6 dated
as of October 15, 1996, Amendment No. 7 dated as of October 15, 1996 and
Amendment No. 8 dated as of March 13, 1997(as so amended, the "Agreement"); and
WHEREAS, the parties hereto desire to amend certain provisions
of the Agreement in the manner set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. (a) Unless otherwise
specifically defined herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date hereof refer
to the Agreement as amended hereby.
SECTION 2. Amendment of Section 1.01 of the Agreement. (A)
The
2
following defined terms in Section 1.01 are redefined in their entirety as
follows:
"Availability Limit" means at any date an amount
equal to the lesser of (i) the aggregate amount of the
Commitments at such date and (ii) $86,000,000.
"Level I Status" exists at any date on which the sum
of (i) the aggregate outstanding amount of the Loans and (ii)
the aggregate Letter of Credit Liabilities is less than 70% of
the Borrowing Base then in effect.
"Level II Status" exists at any date on which the sum
of (i) the aggregate outstanding amount of the Loans and
(ii) the aggregate Letter of Credit Liabilities is greater
than or equal to 70% of the Borrowing Base then in effect.
(B) The definition of "Compensation Trigger Date" in Section
1.01 is deleted.
(C) The definition of "Level III Status" in Section 1.01 is
deleted.
SECTION 3. Amendment of Section 2.05 of the Agreement. (A) In
Section 2.05(a) of the Agreement, the first sentence is amended in its entirety
to read as follows:
(a) Each Domestic Loan shall bear interest on the
outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, as follows:
(1) for any day on which Level I Status
exists, at a rate per annum equal to the lesser of
(x) the Highest Lawful Rate applicable to the Bank
making such Loan and (y) the sum of .25% plus the
Base Rate for such day; and
(2) for any day on which Level II Status
exists, at a rate per annum equal to the lesser of
(x) the Highest Lawful Rate applicable to the Bank
making such Loan and (y) the sum of .50% plus the
Base Rate for such day.
(B) In Section 2.05(b), the defined term "Margin" is amended
in its entirety to read as follows:
"Margin" means (i) for any day on which Level I
Status exists, 1 1/4% or (ii) for any day on which Level II Status exists,
1 1/2%.
2
3
SECTION 4. Amendment of Section 2.06 of the Agreement. (A)
In Section 2.06(a) of the Agreement, the first sentence is amended it its
entirety to read as follows:
(a) During the Revolving Credit Period, the Company
shall pay to the Agent for the accounts of the Banks ratably
in proportion to their Commitments a commitment fee at a rate
of .375% per annum on the daily average amount by which the
Availability Limit exceeds the sum of (i) the aggregate
outstanding principal amount of the Loans and (ii) the
aggregate Letter of Credit Liabilities.
(B) In Section 2.06(b) of the Agreement, the first sentence is
amended in its entirety to read as follows:
(b) The Company shall pay to the Agent a letter of
credit fee, as follows:
(1) for any day on which Level I Status
exists, at the rate of 1 1/4% per annum on the
aggregate amount available for drawing under any
Letter of Credit from time to time, such fee to be
payable for the account of the Banks ratably in
proportion to their participation therein; and
(2) for any day on which Level II Status
exists, at the rate of 1 1/2% per annum on the
aggregate amount available for drawing under any
Letter of Credit from time to time, such fee to be
payable for the account of the Banks ratably in
proportion to their participation therein;
(B) Subsection (d) of Section 2.06 is deleted.
SECTION 5. Amendment of Section 2.14 of the Agreement.
Section 2.14 is amended to read in its entirety as follows:
SECTION 2.14. Borrowing Base. During the period
from and after May 1, 1997 and until the next redetermination
of the Borrowing Base pursuant to this Agreement, the amount
of the Borrowing Base shall be $86,000,000. Upon receipt of
the reports delivered pursuant to Section 5.04 and such other
reports, data, and supplemental information as may, from time
to time, be reasonably requested by the Banks (together with
the Initial Reserve Report, the "Reserve Reports"), together
with a certificate from the President, Treasurer, Controller
or Chief Financial Officer of the Company that, to the best of
his knowledge and in all
3
4
material respects, (i) the information contained in such
Reserve Report is true and correct, (ii) except as set forth
on an exhibit to the certificate, that either of the Company
or a Subsidiary owns good and marketable title to the
Properties evaluated free of all Liens except for Excepted
Liens, (iii) the Banks have valid first and prior liens
pursuant to the Security Instruments on Mortgaged Properties
having an aggregate Value which equals or exceeds 80% of the
aggregate Value of the BB Properties, (iv) except as set forth
on an exhibit to the certificate, on a net basis there are no
gas imbalances, take or pay or other prepayments with respect
to the Company's or any Subsidiary's Oil and Gas Properties
which would require the Company or any Subsidiary to deliver
Hydrocarbons produced from the Company's or any Subsidiary's
Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor which would exceed
$300,000 in the aggregate and (v) no other BB Properties have
been sold since the date of the last Borrowing Base
determination except as set forth on an exhibits to the
certificate, which certificate shall list all BB Properties
sold in compliance with Section 5.18 and in such detail as
reasonably required by the Banks, the Banks will evaluate such
Properties. Based upon such information and upon such other
information as the Agent deems appropriate and consistent with
its normal oil and gas lending criteria as it exists at that
particular time, the Agent will propose a Borrowing Base
within 30 days after a Reserve Report is furnished to the
Banks pursuant to Section 5.04. The Agent shall promptly
notify the Company and the Banks of such proposed Borrowing
Base and such proposed Borrowing Base shall become the
effective Borrowing Base on the thirtieth day following the
giving of such notice and shall be binding on all parties to
this Agreement until the effective date of the next
redetermination unless on or prior to such thirtieth day (A)
the Agent shall have received the written consent of the Banks
to such proposed Borrowing Base, in which case such proposed
Borrowing Base shall become the effective Borrowing Base on
the date of such receipt by the Agent or (B) any Bank rejects
such proposed Borrowing Base by notice to the Agent, in which
case the Banks shall consult with one another with a view to
agreement on the redetermination of the Borrowing Base and the
Borrowing Base shall be redetermined by the Banks in
accordance with their customary oil and gas lending practices.
Any Borrowing Base so redetermined by the Banks shall be
promptly notified to the Company by the Agent, and upon such
notification shall be effective and binding on all parties to
this Agreement until the effective date of the next
redetermination. Until the Company is notified by the Agent
of any redetermination of the Borrowing Base, the Borrowing
Base established for the directly preceding period shall
remain in effect, and thereafter the Borrowing Base as set
forth in such notification shall be in effect.
4
5
The Borrowing Base shall also be adjusted as provided
in Sections 5.05 and 5.18.
SECTION 6. Amendment of Section 5.19 of the Agreement.
Section 5.19 is amended to read in its entirety as follows:
SECTION 5.19. Net Worth. The Company will not
permit its consolidated net worth to be less than $90,000,000
plus fifty percent (50%) of any equity issuances after
December 31, 1996. As used in this Section, "consolidated net
worth" means the sum of preferred stock (if any), par value of
common stock, capital in excess of par value of common stock,
and retained earnings less treasury stock (if any), less
goodwill, cost in excess of net assets acquired and all other
assets as are properly classified as intangible assets, all
determined on a consolidated basis.
SECTION 7. Amendment of Section 5.20 of the Agreement. In
Section 5.20 of the Agreement, the second sentence is amended in its entirety
to read as follows:
As used in this Section, "consolidated cash flow" means net
income after taxes but before dividends on preferred stock
(excluding non-cash income), plus depreciation, depletion and
amortization and non-cash losses including, but not limited
to, cash amounts received by the Company and its Subsidiaries
as capital contributions, all as determined on a consolidated
basis (excluding consolidated cash flow of Bridge Subsidiaries
and Debt Subsidiaries).
SECTION 8. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 9. Counterparts; Effectiveness. This Amendment may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective upon receipt by the Agent
of: (i) duly executed counterparts hereof signed by the Company, each of the
Banks and the Co-Agent (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution
of a counterpart hereof by such party), (ii) an opinion of counsel for the
Company, substantially to the effect of Exhibit B to the Agreement with respect
to this Amendment and the Agreement as amended hereby, and (iv) all documents
or opinions the Agent may reasonably request relating to the existence of the
Company, its Subsidiaries and the Partnerships, the corporate authority for and
the validity of the Financing
5
6
Documents, title to the Mortgaged Properties, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent.
6
7
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
AMERICAN EXPLORATION COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Title: Senior Vice President and
Chief Financial Officer
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
BANK OF MONTREAL, as a Bank and
as a Co-Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Title: Director, U.S. Corporate Banking
7
8
BANQUE PARIBAS
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: Group Vice President
BANK ONE TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
-----------------------------
Title: Vice President
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Vice President
8