THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (herein called this
"Amendment") made as of the 22nd day of April, 1998 by and among Inland
Production Company, a Texas corporation, (herein called "Borrower"), Inland
Resources Inc., a Washington corporation (herein called "Parent"), and ING
(U.S.) Capital Corporation, as Agent (herein called "Agent") and as a Bank,
and the other Banks,
W I T N E S S E T H:
WHEREAS, Borrower, Agent, and the Banks have entered into that certain
Credit Agreement dated as of September 23, 1997, as amended by that certain
First Amendment to Credit Agreement dated as of December 12, 1997 and that
certain Second Amendment to Credit Agreement dated as of December 24, 1997
(as so amended, the "Original Agreement"), for the purposes and consideration
therein expressed, pursuant to which the Banks became obligated to make loans
to Borrower as therein provided;
WHEREAS, Borrower, Parent, Trust Company of the West, in its capacity as
noteholder ("Noteholder"), and TCW Asset Management Company, in its
capacities as Agent and Collateral Agent (in its capacity as Agent, "Tamco"),
have entered into that certain Credit Agreement dated as of September 23,
1997, as amended by the certain First Amendment to Credit Agreement dated as
of December 24, 1997;
WHEREAS, Borrower, Parent, Noteholder, Tamco, Banks and Agent have
entered into that certain Intercreditor Agreement dated as of September 23,
1997, in order to set forth various rights between the parties to the
respective credit agreements, as amended by that certain First Amendment to
Intercreditor Agreement dated as of December 12, 1997, and that certain
Second Amendment to Intercreditor Agreement dated as of December 24, 1997;
WHEREAS, Borrower, Parent and Banks desire to amend the Original
Agreement as provided 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 Banks 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. TERMS DEFINED IN THE ORIGINAL AGREEMENT. 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.
Section 1.2. OTHER DEFINED TERMS. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.
"AMENDMENT" means this Third Amendment to Credit Agreement.
"AMENDMENT DOCUMENTS" means, collectively, this Amendment and the
Renewal Note.
"CREDIT AGREEMENT" means the Original Agreement as amended hereby.
"ORIGINAL NOTE" means that certain promissory note made by Borrower to
the order of Agent in the original principal amount of $80,000,000 dated as
of September 23, 1997.
"PARIBAS FACILITY REPAYMENT DATE" means the date on which all of the
following have occurred (i) the Credit Agreement dated December 24, 1997
between Inland Refining and Banque Paribas has been terminated and all of
Inland Refining's obligations thereunder have been paid in full, (ii) all
liens encumbering property of Inland Refining in favor of Banque Paribas
have been released and (iii) all of the conditions set forth in Section 3.2
of this Amendment are satisfied; provided, however, that if all conditions
set forth in clauses (i), (ii), and (iii) of this definition are not
satisfied on or before May 15, 1998, then the Paribas Facility Repayment
Date shall not occur.
"PLEDGE AGREEMENT" means that certain Pledge Agreement made by Parent
in favor of Agent dated as of September 23, 1997, as amended.
"PRODUCTION SECURITY AGREEMENT" means that certain Security Agreement
made by Borrower in favor of Agent dated as of September 23, 1997, as
amended.
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ARTICLE IIA.
AMENDMENTS EFFECTIVE IMMEDIATELY
Section 2A. AMENDMENTS EFFECTIVE IMMEDIATELY. The following
amendments shall be effective upon the satisfaction of the conditions set
forth in Section 3.1 without regard to the Paribas Facility Repayment Date:
Section 2A.1. DEFINED TERMS. The following definitions are hereby added
to Annex A to the Credit Agreement:
'CRYSEN REFINERY' means that certain refinery located in ▇▇▇▇▇ Cross,
Utah.
'PRODUCTION/REFINING CREDIT AGREEMENT' means that certain Credit
Agreement to be entered into between Inland Refining, as borrower, and
Borrower, as lender, pursuant to which Borrower shall agree to provide
credit to Inland Refining; such Credit Agreement to be on terms acceptable
to all Banks in their sole discretion, including without limitation the
subordination of any loans or advances pursuant to such Credit Agreement to
the Bank Indebtedness and the TCW Indebtedness.
'PRODUCTION/REFINING LOAN' means those loans to be extended to Inland
Refining by Borrower pursuant to the Production/Refining Credit Agreement.
Section 2A.2. SCHEDULED PRINCIPAL PAYMENTS. Section 2.8 of the
Original Agreement is hereby amended in its entirety to read as follows:
"Section 2.8. SCHEDULED PRINCIPAL PAYMENTS. Beginning on June 29,
1999, and on each Quarterly Payment Date thereafter, Borrower will, in
addition to paying any interest then due on the Loans, make a principal
payment in accordance with the following schedule:
Quarterly Amount
Payment Date of Payment
------------ ----------
June 29, 1999 $5,777,778
Sept 29, 1999 $5,777,778
Dec 30, 1999 $5,777,778
Mar 30, 2000 $4,333,333
June 29, 2000 $4,333,333
Sept 28, 2000 $4,333,333
Dec 28, 2000 $4,333,333
Mar 29, 2001 $3,611,111
June 28, 2001 $3,611,111
Sept 27, 2001 $3,611,111
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Quarterly Amount
Payment Date of Payment
------------ ----------
Dec 28, 2001 $3,611,111
Mar 28, 2002 $3,250,000
June 27, 2002 $3,250,000
Sept 27, 2002 $3,250,000
Dec 30, 2002 $3,250,000
Mar 28, 2003 $2,888,889
The principal installments required by this Section 2.8 are in addition to
all other principal payments required by the terms of this Agreement." "
Section 2A.3. BORROWING BASE. Pursuant to Section 2.10 of the Credit
Agreement, Agent hereby notifies Borrower that the new Borrowing Base under
the Credit Agreement from the date hereof until the Paribas Facility
Repayment Date or the next Determination Date shall be $57,000,000 and that
the Borrowing Base after the Paribas Facility Repayment Date and until the
next Determination Date shall be $65,000,000.
Section 2A.4. BANK SCHEDULE. The Bank Schedule attached to the Original
Agreement is hereby replaced with Schedule 1 attached hereto.
Section 2A.5. COVENANTS. Annex C of the Original Agreement is hereby
amended as set forth on Attachment C-1 hereto.
ARTICLE IIB.
AMENDMENTS EFFECTIVE UPON PARIBAS FACILITY REPAYMENT DATE
Section 2.B. AMENDMENTS EFFECTIVE UPON PARIBAS FACILITY REPAYMENT
DATE. The following amendments shall be effective only upon the Paribas
Facility Repayment Date:
Section 2.B.1. DEFINED TERMS.
(a) The following definitions are hereby added to 1.1 of the
Original Agreement:
"'BANK PARTIES' means Agent, LC Issuer, and all Banks.
'LC APPLICATION' means any application for a Letter of Credit
hereafter made by Borrower to LC Issuer.
'LC COLLATERAL' has the meaning given it in Section 2.16(a).
'LC ISSUER' means, collectively, ING (U.S.) Capital Corporation and
U.S. Bank National Association, or either of them, in their capacity as the
issuer or issuers of Letters
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of Credit hereunder, and their successors in such capacity. Agent may,
with the consent of Borrower and the Bank in question, appoint any Bank
hereunder as an LC Issuer in place of or in addition to either such LC
Issuer.
'LC OBLIGATIONS' means, at the time in question, the sum of all
Matured LC Obligations plus the Maximum Drawing Amount.
'LETTER OF CREDIT' means any letter of credit issued by LC Issuer
hereunder at the application of Borrower. Each Letter of Credit shall be
classified by LC Issuer as a 'COMMERCIAL' Letter of Credit or a 'STANDBY'
Letter of Credit (and each Standby Letter of Credit shall be subclassified
as a 'FINANCIAL STANDBY' Letter of Credit or a 'PERFORMANCE STANDBY' Letter
of Credit), in accordance with the Laws and regulations applicable to LC
Issuer from time to time and in accordance with LC Issuer's customary
practices at such times for reporting to regulatory authorities.
'MATURED LC OBLIGATIONS' means all amounts paid by LC Issuer on drafts
or demands for payment drawn or made under or purported to be under any
Letter of Credit and all other amounts due and owing to LC Issuer under any
LC Application for any Letter of Credit, to the extent the same have not
been repaid to LC Issuer (with the proceeds of Loans or otherwise).
'MAXIMUM DRAWING AMOUNT' means at the time in question the sum of the
maximum amounts which LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit then outstanding.
(b) The following definitions in Section 1.1 of the Original
Agreement are hereby amended in their entirety to read as follows:
"'AGENT' means ING (U.S.) Capital Corporation, as Agent hereunder
(including its capacity as LC Issuer hereunder), and its successors in such
capacity.
'LOAN DOCUMENTS' means this Agreement, the Notes, the LC Applications,
the Letters of Credit, the Security Documents, the Intercreditor Agreement,
and all other agreements, certificates, documents, instruments and writings
at any time delivered in connection herewith or therewith (exclusive of
term sheets, commitment letters, correspondence and similar documents used
in the negotiation hereof, except to the extent the same contain
information about Borrower or its Affiliates, properties, business or
prospects).
'OBLIGATIONS' means all Debt from time to time owing by any Related
Person to any Lender under or pursuant to any of the Loan Documents,
including all LC Obligations. 'OBLIGATION' means any part of the
Obligations.
'PERCENTAGE SHARE' means, with respect to any Bank (a) when used in
Sections 2.1 or 2.5, in any Borrowing Notice or when no Loans are
outstanding hereunder, the percentage set forth opposite such Bank's name
on the Bank Schedule attached hereto,
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and (b) when used otherwise, the percentage obtained by dividing (i) the
sum of the unpaid principal balance of such Bank's Loans at the time in
question plus the Matured LC Obligations which such Bank has funded
pursuant to Section 2.13(c) plus the portion of the Maximum Drawing
Amount which such Bank might be obligated to fund under Section 2.13(c),
by (ii) the sum of the aggregate unpaid principal balance of all Loans
at such time plus the aggregate amount of LC Obligations outstanding at
such time."
Section 2.B.2. COMMITMENTS TO LEND; NOTES. The first sentence of
Section 2.1 of the Original Agreement is hereby amended in its entirety to
read as follows:
"Subject to the terms and conditions hereof, each Bank agrees to make
loans to Borrower (herein called such Bank's 'Loans') upon Borrower's
request from time to time during the Commitment Period, provided that (a)
subject to Sections 3.3, 3.4 and 3.6, all Banks are requested to make Loans
of the same Type in accordance with their respective Percentage Shares and
as part of the same Borrowing, (b) the sum of (i) the aggregate amount of
such Bank's Loans outstanding at any time plus (ii) the Maximum Drawing
Amount for which such Bank is liable to purchase participations under
Section 9.5, plus (iii) the Matured LC Obligations which have been funded
by such Bank under such section, does not exceed such Bank's Percentage
Share of the Borrowing Base determined as of the date on which the
requested Loan is to be made, and (c) after giving effect to such Loans,
the aggregate amount of all Loans plus all LC Obligations does not exceed
the Borrowing Base determined as of the date on which the requested Loans
are to be made."
Section 2.B.3. USE OF PROCEEDS. Section 2.4 of the Original Agreement
is hereby amended in its entirety to read as follows:
"Borrower shall use the proceeds of the first Loan to pay in full the
Debt outstanding under the CIBC Credit Agreement. Borrower shall use all
subsequent Loans to (i) finance future proved oil and gas acquisitions and
development by Borrower, (ii) make advances to Inland Refining to finance
(A) the Crysen Acquisition (but only if all Banks first approve the terms
thereof) and (B) the purchase of fixed assets during the year ending
December 31, 1998 up to the amount of $2,500,000, (iii) provide working
capital for its operations, (iv) make advances to Inland Refining from time
to time to (A) provide working capital for its operations, and (B) repay
the Refining Loan in full, provided that the advances, exclusive of the
advance made under Subparagraph (ii)(A) of this Section 2.4, to Inland
Refining plus Letters of Credit issued for the benefit of Inland Refining,
plus any amounts that have been advanced pursuant to any such Letter of
Credit which have not been reimbursed by Inland Refining to Borrower, shall
not in the aggregate (but without duplication) exceed the amount of
$20,000,000 outstanding at any one time, and (v) refinance its Matured LC
Obligations; provided, however, that Borrower shall not use any Loans to
make advances to Inland Refining, including without limitation advances to
finance any fixed assets at the Crysen Refinery, except as specifically set
forth in this sentence. Borrower shall use all Letters of Credit for its
general corporate purposes and to support agreements for the purchase by
Inland Refining of refining feed stocks in the ordinary course of business.
In no event shall the funds from any Loan or any Letter of
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Credit be used directly or indirectly by any Person for personal,
family, household or agricultural purposes or for the purpose, whether
immediate, incidental or ultimate, of purchasing, acquiring or carrying
any "margin stock" or any "margin securities" (as such terms are defined
respectively in Regulation U and Regulation G promulgated by the Board
of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying
any such margin stock or margin securities. Borrower represents and
warrants that Borrower is not engaged principally, or as one of
Borrower's important activities, in the business of extending credit to
others for the purpose of purchasing or carrying such margin stock or
margin securities."
Section 2.B.4. FEES. Section 2.5(a) of the Original Agreement is
hereby amended in its entirety to read as follows:
"(a) COMMITMENT FEE. In consideration of each Bank's commitment to
make Loans, Borrower will pay to Agent for the account of each Bank a
commitment fee determined on a daily basis by applying a rate of one-half
of one percent (0.5%) per annum to such Bank's Percentage Share of the
unused portion of the Borrowing Base on each day during the Commitment
Period, determined for each such day by deducting from the amount of the
Borrowing Base at the end of such day the sum of (i) the Facility Usage and
(ii) the amount of all LC Obligations outstanding at the end of such day.
This commitment fee shall be due and payable in arrears on the last
Business Day after the end of each Fiscal Quarter and at the end of the
Commitment Period."
Section 2.B.5. MANDATORY PREPAYMENTS. The first clause of Section
2.7(b) of the Original Agreement is hereby amended in its entirety to read as
follows:
"(b) If at any time the Facility Usage plus the aggregate of amount of
outstanding LC Obligations is in excess of the Borrowing Base (such excess
being herein called a "Borrowing Base Deficiency"), Borrower shall, within
five Business Days after Agent gives notice of such fact to Borrower,
either:"
Section 2.B.6. LOANS. Article II of the Credit Agreement is hereby
amended by adding the following sections 2.11, 2.12, 2.13, 2.14, 2.15, and
2.16:
"Section 2.11 LETTERS OF CREDIT. Subject to the terms and conditions
hereof, Borrower may during the Commitment Period request either LC Issuer
to issue one or more Letters of Credit, provided that, after taking such
Letter of Credit into account:
(a) the Facility Usage does not exceed the Borrowing Base at such
time; and
(b) the aggregate amount of LC Obligations at such time does not
exceed $9,750,000; and
(c) the expiration date of such Letter of Credit is prior to the end
of the Commitment Period.
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and further provided that:
(d) such Letter of Credit is to be used to support (i) agreements for
the purchase by Inland Refining of refinery feed stocks in the ordinary
course of business and (ii) up to the amount of $200,000, obligations for
diesel fuel and motor fuel taxes payable to the State of Utah;
(e) such Letter of Credit is not directly or indirectly used to assure
payment of or otherwise support any Indebtedness of any Person;
(f) the issuance of such Letter of Credit will be in compliance with
all applicable governmental restrictions, policies, and guidelines and will
not subject LC Issuer to any cost which is not reimbursable under Article
III;
(g) the form and terms of such Letter of Credit are acceptable to such
LC Issuer in its sole and absolute discretion; and
(h) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
An LC Issuer will honor any such request if the foregoing conditions (a)
through (h) (in the following Section 2.12 called the "LC CONDITIONS") have
been met as of the date of issuance of such Letter of Credit. An LC Issuer
may choose to honor any such request for any other Letter of Credit but has
no obligation to do so and may refuse to issue any other requested Letter
of Credit for any reason which such LC Issuer in its sole discretion deems
relevant.
Section 2.12 REQUESTING LETTERS OF CREDIT. Borrower must make
written application for any Letter of Credit from any LC Issuer at least
three Business Days before the date on which Borrower desires for such LC
Issuer to issue such Letter of Credit. A copy of such application shall be
simultaneously delivered to Agent. By making any such written application
Borrower shall be deemed to have represented and warranted to each Bank
that the LC Conditions described in Section 2.11 will be met as of the date
of issuance of such Letter of Credit. Each such written application for a
Letter of Credit must be made in writing in the form and substance of
Exhibit G, the terms and provisions of which are hereby incorporated herein
by reference (or in such other form as may mutually be agreed upon by
Agent, LC Issuer and Borrower). Two Business Days after the LC Conditions
for a Letter of Credit have been met as described in Section 2.11 (or if an
LC Issuer otherwise desires to issue such Letter of Credit), LC Issuer will
issue such Letter of Credit at LC Issuer's office, and will provide Agent
with a specimen copy of the Letter of Credit so issued. If any provisions
of any LC Application conflict with any provisions of this Agreement, the
provisions of this Agreement shall govern and control.
Section 2.13 REIMBURSEMENT AND PARTICIPATIONS.
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(a) REIMBURSEMENT BY BORROWER. Each Matured LC Obligation shall
constitute a loan by LC Issuer to Borrower. Borrower promises to pay to LC
Issuer, or to LC Issuer's order, on demand, the full amount of each Matured
LC Obligation, together with interest thereon at the Late Payment Rate.
(b) LETTER OF CREDIT ADVANCES. If the beneficiary of any Letter of
Credit makes a draft or other demand for payment thereunder then Borrower
may, during the interval between the making thereof and the honoring
thereof by LC Issuer, request Banks to make Loans to Borrower in the amount
of such draft or demand, which Loans shall be made concurrently with LC
Issuer's payment of such draft or demand and shall be immediately used by
LC Issuer to repay the amount of the resulting Matured LC Obligation. Such
a request by Borrower shall be made in compliance with all of the
provisions hereof, provided that for the purposes of the first sentence of
Section 2.1 the amount of such Loans shall be considered but the amount of
the Matured LC Obligation to be concurrently paid by such Loans shall not
be considered.
(c) PARTICIPATION BY BANKS. Each LC Issuer irrevocably agrees to
grant and hereby grants to each Bank, and -- to induce each LC Issuer to
issue Letters of Credit hereunder -- each Bank irrevocably agrees to accept
and purchase and hereby accepts and purchases from such LC Issuer, on the
terms and conditions hereinafter stated and for such Bank's own account and
risk, an undivided interest equal to such Bank's Percentage Share of such
LC Issuer's obligations and rights under each Letter of Credit issued
hereunder by such LC Issuer and the amount of each Matured LC Obligation
paid by such LC Issuer thereunder. Each Bank unconditionally and
irrevocably agrees with LC Issuer that, if a Matured LC Obligation is paid
under any Letter of Credit for which such LC Issuer is not reimbursed in
full by Borrower in accordance with the terms of this Agreement and the
related LC Application (including any reimbursement by means of concurrent
Loans or by the application of LC Collateral), such Bank shall (in all
circumstances and without set-off or counterclaim) pay to such LC Issuer on
demand, in immediately available funds at such LC Issuer's address for
notices hereunder, such Bank's Percentage Share of such Matured LC
Obligation (or any portion thereof which has not been reimbursed by
Borrower). Each Bank's obligation to pay an LC Issuer pursuant to the
terms of this subsection is irrevocable and unconditional. If any amount
required to be paid by any Bank to an LC Issuer pursuant to this subsection
is paid by such Bank to an LC Issuer within three Business Days after the
date such payment is due, LC Issuer shall in addition to such amount be
entitled to recover from such Bank, on demand, interest thereon calculated
from such due date at the Federal Funds Rate. If any amount required to be
paid by any Bank to LC Issuer pursuant to this subsection is not paid by
such Bank to LC Issuer within three Business Days after the date such
payment is due, LC Issuer shall in addition to such amount be entitled to
recover from such Bank, on demand, interest thereon calculated from such
due date at the Late Payment Rate.
(d) DISTRIBUTIONS TO PARTICIPANTS. Whenever an LC Issuer has in
accordance with this section received from any Bank payment of such Bank's
Percentage Share of any Matured LC Obligation, if such LC Issuer thereafter
receives any payment of such Matured LC Obligation or any payment of
interest thereon (whether directly from
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Borrower or by application of LC Collateral or otherwise, and excluding
only interest for any period prior to such LC Issuer's demand that such
Bank make such payment of its Percentage Share), such LC Issuer will
distribute to such Bank its Percentage Share of the amounts so received
by such LC Issuer; PROVIDED, HOWEVER, that if any such payment received
by an LC Issuer must thereafter be returned by such LC Issuer, such Bank
shall return to such LC Issuer the portion thereof which such LC Issuer
has previously distributed to it.
(e) CALCULATIONS. A written advice setting forth in reasonable
detail the amounts owing under this section, submitted by an LC Issuer to
Borrower or any Bank from time to time, shall be conclusive, absent
manifest error, as to the amounts thereof.
Section 2.14 LETTER OF CREDIT FEES. In consideration of LC Issuer's
issuance of any Letter of Credit, Borrower agrees to pay (a) to Agent, for
the account of all Banks in accordance with their respective Percentage
Shares, a letter of credit fee at a rate equal to one and five-eighths
percent (1.625%) per annum of the amount of all Letters of Credit, and (b)
to a LC Issuer for its own account, a letter of credit fronting fee at a
rate equal to one-eighth percent (.125%) per annum of each Letter of Credit
issued by such LC Issuer. Each such fee will be calculated on a daily
basis, on the face amount of Letters of Credit outstanding on each day at
the above applicable rate and will be payable quarterly in arrears. In
addition, Borrower will pay to an LC Issuer a minimum administrative
issuance fee of $200 for each Letter of Credit issued by such LC Issuer and
an amendment fee of $65 for each Letter of Credit, each such fee to be
payable upon issuance or amendment, respectively, of a Letter of Credit.
Section 2.15 NO DUTY TO INQUIRE.
(a) DRAFTS AND DEMANDS. LC Issuer is authorized and instructed to
accept and pay drafts and demands for payment under any Letter of Credit
without requiring, and without responsibility for, any determination as to
the existence of any event giving rise to said draft, either at the time of
acceptance or payment or thereafter. LC Issuer is under no duty to
determine the proper identity of anyone presenting such a draft or making
such a demand (whether by tested telex or otherwise) as the officer,
representative or agent of any beneficiary under any Letter of Credit, and
payment by LC Issuer to any such beneficiary when requested by any such
purported officer, representative or agent is hereby authorized and
approved. Borrower agrees to hold LC Issuer and each other Bank Party
harmless and indemnified against any liability or claim in connection with
or arising out of the subject matter of this section, WHICH INDEMNITY SHALL
APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY
EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY
KIND BY ANY BANK PARTY, provided only that no Bank Party shall be entitled
to indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment.
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(b) EXTENSION OF MATURITY. If the maturity of any Letter of Credit
is extended by its terms or by Law or governmental action, if any extension
of the maturity or time for presentation of drafts or any other
modification of the terms of any Letter of Credit is made at the request of
any Related Person, or if the amount of any Letter of Credit is increased
at the request of any Related Person, this Agreement shall be binding upon
all Related Persons with respect to such Letter of Credit as so extended,
increased or otherwise modified, with respect to drafts and property
covered thereby, and with respect to any action taken by LC Issuer, LC
Issuer's correspondents, or any Bank Party in accordance with such
extension, increase or other modification.
(c) TRANSFEREES OF LETTERS OF CREDIT. If any Letter of Credit
provides that it is transferable, LC Issuer shall have no duty to determine
the proper identity of anyone appearing as transferee of such Letter of
Credit, nor shall LC Issuer be charged with responsibility of any nature or
character for the validity or correctness of any transfer or successive
transfers, and payment by LC Issuer to any purported transferee or
transferees as determined by LC Issuer is hereby authorized and approved,
and Borrower further agrees to hold LC Issuer and each other Bank Party
harmless and indemnified against any liability or claim in connection with
or arising out of the foregoing, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT
ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE
OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY BANK PARTY,
provided only that no Bank Party shall be entitled to indemnification for
that portion, if any, of any liability or claim which is proximately caused
by its own individual gross negligence or willful misconduct, as determined
in a final judgment.
Section 2.16 LC COLLATERAL.
(a) LC OBLIGATIONS IN EXCESS OF BORROWING BASE. If, after the making
of all mandatory prepayments required under Section 2.7, the outstanding LC
Obligations will exceed the Borrowing Base, then in addition to prepayment
of the Borrowing Base Deficiency Borrower will immediately pay to LC Issuer
an amount equal to such excess. LC Issuer will hold such amount as
security for the remaining LC Obligations (all such amounts held as
security for LC Obligations being herein collectively called "LC
COLLATERAL") until such LC Obligations become Matured LC Obligations, at
which time such LC Collateral may be applied to such Matured LC
Obligations. Neither this subsection nor the following subsection shall,
however, limit or impair any rights which LC Issuer may have under any
other document or agreement relating to any Letter of Credit or LC
Obligation, including any LC Application, or any rights which any Bank
Party may have to otherwise apply any payments by Borrower and any LC
Collateral under Section 3.1.
(b) ACCELERATION OF LC OBLIGATIONS. If the Obligations or any part
thereof become immediately due and payable pursuant to Section 7.1 then,
unless Required Lenders otherwise specifically elect to the contrary (which
election may thereafter by retracted by Required Lenders at any time), all
LC Obligations shall become immediately
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due and payable without regard to whether or not actual drawings or
payments on the Letters of Credit have occurred, and Borrower shall be
obligated to pay to LC Issuer immediately an amount equal to the
aggregate LC Obligations which are then outstanding. All amounts so paid
shall first be applied to Matured LC Obligations and then held by LC
Issuer as LC Collateral until such LC Obligations become Matured LC
Obligations, at which time such LC Collateral shall be applied to such
Matured LC Obligations.
(c) INVESTMENT OF LC COLLATERAL. Pending application thereof, all LC
Collateral shall be invested by LC Issuer in such investments as LC Issuer
may choose in its sole discretion. All interest on such investments shall
be reinvested or applied to Matured LC Obligations. When all Obligations
have been satisfied in full, including all LC Obligations, all Letters of
Credit have expired or been terminated, and all of Borrower's reimbursement
obligations in connection therewith have been satisfied in full, LC Issuer
shall release any remaining LC Collateral. Borrower hereby assigns and
grants to LC Issuer a continuing security interest in all LC Collateral
paid by it to LC Issuer, all investments purchased with such LC Collateral,
and all proceeds thereof to secure its Matured LC Obligations and its
Obligations under this Agreement, each Note, and the other Loan Documents,
and Borrower agrees that such LC Collateral and investments shall be
subject to all of the terms and conditions of the Security Documents.
Borrower further agrees that LC Issuer shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code as adopted in
the State of New York with respect to such security interest and that an
Event of Default under this Agreement shall constitute a default for
purposes of such security interest.
(d) PAYMENT OF LC COLLATERAL. When Borrower is required to provide
LC Collateral for any reason and fails to do so on the day when required,
LC Issuer may without notice to Borrower or any other Related Person
provide such LC Collateral (whether by application of proceeds of other
Collateral, by transfers from other accounts maintained with LC Issuer, or
otherwise) using any available funds of Borrower or any other Person also
liable to make such payments. Any such amounts which are required to be
provided as LC Collateral and which are not provided on the date required
shall, for purposes of each Security Document, be considered past due
Obligations owing hereunder, and LC Issuer is hereby authorized to exercise
its respective rights under each Security Document to obtain such amounts."
Section 2.B.7. GENERAL PROCEDURES. The last sentence of Section 3.1 of
the Original Agreement is hereby amended in its entirety to read as follows:
"All distributions of amounts described in any of subsections (b),
(c), or (d) above shall be made by Agent pro rata to Agent and each Lender
then owed Obligations described in such subsection in proportion to all
amounts owed all Lenders which are described in such subsection; provided
that if any Lender then owes payments to Agent for the purchase of a
participation under Section 9.5 hereof, any amounts otherwise distributable
under this section to such Lender shall be deemed to belong to Agent, to
the
12
extent of such unpaid payments, and Agent shall apply such amounts to
make such unpaid payments rather than distribute such amounts to such
Lender."
Section 2.B.8. CAPITAL REIMBURSEMENT Section 3.2 of the Original
Agreement is hereby amended in its entirety to read as follows:
"Section 3.2 CAPITAL REIMBURSEMENT. If either (a) the introduction
or implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or
the compliance with any request, directive or guideline from any central
bank or other governmental authority (whether or not having the force of
Law) affects or would affect the amount of capital required or expected to
be maintained by any Lender or any corporation controlling any Lender,
then, upon demand by such Lender, Borrower will pay to Agent for the
benefit of such Lender, from time to time as specified by such Lender, such
additional amount or amounts which such Lender shall determine to be
appropriate to compensate such Lender or any corporation controlling such
Lender in light of such circumstances, to the extent that such Lender
reasonably determines that the amount of any such capital would be
increased or the rate of return on any such capital would be reduced by or
in whole or in part based on the existence of the face amount of such
Lender's Loans, commitments, or the provisions concerning the issuance of
Letters of Credit under this Agreement."
Section 2.B.9. INCREASED COST OF EURODOLLAR LOANS. Section 3.3 of the
Original Agreement is hereby amended in its entirety to read as follows:
"Section 3.3 INCREASED COST OF EURODOLLAR LOANS AND LETTERS OF
CREDIT. If any applicable Law (whether now in effect or hereinafter
enacted or promulgated, including Regulation D) or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force
of Law):
(a) shall change the basis of taxation of payments to any Lender
of any principal, interest, or other amounts attributable to any
Eurodollar Loan or otherwise due under this Agreement in respect of
any Eurodollar Loan or Letter of Credit (other than taxes imposed on
the overall net income of such Lender or any lending office of such
Lender by any jurisdiction in which such Lender or any such lending
office is located); or
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
Eurodollar Loan or Letter of Credit (excluding those for which such
Lender is fully compensated pursuant to adjustments made in the
definition of Eurodollar Rate) or against assets of, deposits with or
for the account of, or credit extended by, such Lender; or
(c) shall impose on any Lender or the interbank Eurocurrency
deposit market any other condition affecting any Eurodollar Loan or
Letter of Credit, the
13
result of which is to increase the cost to any Lender of funding or
maintaining any Eurodollar Loan or of issuing any Letter of Credit
or to reduce the amount of any sum receivable by any Lender in
respect of any Eurodollar Loan or Letter of Credit by an amount
deemed by such Lender to be material,
then such Lender shall promptly notify Agent and Borrower in writing of the
happening of such event and of the amount required to compensate such
Lender for such event (on an after-tax basis, taking into account any taxes
on such compensation), whereupon (d) Borrower shall pay such amount to
Agent for the account of such Lender and (e) Borrower may elect, by giving
to Agent and such Lender not less than three Business Days' notice, to
convert all (but not less than all) of any such Eurodollar Loans into Base
Rate Loans."
Section 2.B.10. AVAILABILITY. Section 3.4 of the Original Agreement is
hereby amended in its entirety to read as follows:
"Section 3.4. AVAILABILITY. If (a) any change in applicable Laws, or
in the interpretation or administration thereof of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable
for any Lender to fund or maintain Eurodollar Loans, or shall materially
restrict the authority of any Lender to purchase or take offshore deposits
of dollars (i.e., "eurodollars") or to issue Letters of Credit, (b) any
Lender determines that matching deposits appropriate to fund or maintain
any Eurodollar Loan are not available to it, or (c) any Lender determines
that the formula for calculating the Eurodollar Rate does not fairly
reflect the cost to such Lender of making or maintaining loans based on
such rate, then, upon notice by such Lender to Borrower and Agent,
Borrower's right to elect Eurodollar Loans or to apply for Letters of
Credit from such Lender shall be suspended to the extent and for the
duration of such illegality, impracticability or restriction and all
Eurodollar Loans of such Lender which are then outstanding or are then the
subject of any Borrowing Notice and which cannot lawfully or practicably be
maintained or funded shall immediately become or remain, or shall be funded
as, Base Rate Loans of such Lender. Borrower agrees to indemnify each
Lender and hold it harmless against all costs, expenses, claims, penalties,
liabilities and damages which may result from any such change in Law,
interpretation or administration (other than taxes imposed on the overall
net income of such Lender or any lending office of such Lender). Such
indemnification shall be on an after-tax basis, taking into account any
taxes imposed on the amounts paid as indemnity."
Section 2.B.11. REIMBURSABLE TAXES. Section 3.6(a) of the Original
Agreement is hereby amended in its entirety to read as follows:
"(a) Borrower will indemnify each Lender against and reimburse each
Lender for all present and future income, stamp and other taxes, levies,
costs and charges whatsoever imposed, assessed, levied or collected on or
in respect of this Agreement or any Eurodollar Loans or Letters of Credit
(whether or not legally or correctly imposed, assessed, levied or
collected), excluding, however, any taxes imposed on or measured by the
overall net income of Agent or such Lender or any lending office of such
Lender by
14
any jurisdiction in which such Lender or any such lending office
is located (all such non-excluded taxes, levies, costs and charges being
collectively called 'Reimbursable Taxes' in this section). Such
indemnification shall be on an after-tax basis, taking into account any
taxes imposed on the amounts paid as indemnity."
Section 2.B.12. ADDITIONAL CONDITIONS PRECEDENT. Section 4.3 of the
Original Agreement is hereby amended in its entirety to read as follows:
"Section 4.3. ADDITIONAL CONDITIONS PRECEDENT. No Bank has any
obligation to make any Loan (including its first) or issue any Letter of
Credit, unless the following conditions precedent have been satisfied on
the date of such Loan or the date of issuance of such Letter of Credit:
(a) All representations and warranties made by any Related
Person in any Loan Document shall be true on and as of the date of
such Loan or such Letter of Credit (except to the extent that the
facts upon which such representations are based have been changed by
the extension of credit hereunder) as if such representations and
warranties had been made as of the date of such Loan or Letter of
Credit.
(b) No Default shall exist at the date of such Loan or Letter of
Credit.
(c) No Material Adverse Change shall have occurred to, and no
event or circumstance shall have occurred that could cause a Material
Adverse Change to, Borrower's Consolidated financial condition or
businesses since the date of this Agreement.
(d) Each Related Person shall have performed and complied with
all agreements and conditions required in the Loan Documents to be
performed or complied with by it on or prior to the date of such Loan
or Letter of Credit.
(e) The making of such Loan or the issuance of such Letter of
Credit shall not be prohibited by any Law and shall not subject any
Bank to any penalty or other onerous condition under or pursuant to
any such Law.
(f) Agent shall have received all documents and instruments
which Agent has then requested, in addition to those described in
Section 4.1 (including opinions of legal counsel for Related Persons
and Agent; corporate documents and records; documents evidencing
governmental authorizations, consents, approvals, licenses and
exemptions; and certificates of public officials and of officers and
representatives of Borrower and other Persons), as to (f) the accuracy
and validity of or compliance with all representations, warranties and
covenants made by any Related Person in this Agreement and the other
Loan Documents,(g) the satisfaction of all conditions contained herein
or therein, and (h) all other matters pertaining hereto and thereto.
All such additional documents and instruments shall be satisfactory to
Agent in form, substance and date.
15
Section 2.B.13. COVENANTS. Annex C of the Original Agreement is hereby
amended as set forth on Attachment C-2 hereto.
ARTICLE IIC.
AMENDMENTS TO SECURITY DOCUMENTS
Section 2C.1. PRODUCTION SECURITY AGREEMENT. Section 2.2 of the
Production Security Agreement is hereby amended in its entirety to read as
follows (without regard to the Paribas Facility Repayment Date):
"Section 2.2 OBLIGATIONS SECURED. The security interest created
hereby in the Collateral constitutes continuing collateral security for all
of the following obligations, indebtedness and liabilities, whether now
existing or hereafter incurred:
(a) CREDIT AGREEMENT INDEBTEDNESS. The payment by Debtor, as and
when due and payable, of all amounts from time to time owing by Debtor
under or in respect of the Credit Agreement, the Notes or any of the
other Obligation Documents.
(b) HEDGING OBLIGATIONS. All present or future "Hedging Obligations"
incurred or owing by Debtor to any Bank. As used in this Section 2.2,
"Hedging Obligations" means any indebtedness or obligations, however
arising, to make payments or take actions under or pursuant to any
present or future agreement (including any individual agreement or any
master agreement and the various transactions and confirmations made
thereunder) governing any swap, put, call, cap, floor or collar
transaction, or other type of agreement or transaction relating to
interest rates, currency exchange rates, or the price or delivery (at
any one or more locations or in any one or more markets) of crude oil,
natural gas, petroleum products, other hydrocarbons, agricultural
products, precious metals, stocks or bonds or indices thereof, or any
other commodity, contract or other item of property traded in any
market, and all interest thereon and expenses and other amounts
payable in connection therewith.
(c) RENEWALS. All renewals, extensions, amendments, modifications,
supplements, or restatements of or substitutions for any of the
foregoing.
(d) PERFORMANCE. The due performance and observance by Debtor of all
of its other obligations from time to time existing under or in
respect of any of the Obligation Documents."
Section 2C.2. PLEDGE AGREEMENT. Section 2.2 of the Pledge Agreement is
hereby amended in its entirety to read as follows:
16
"Section 2.2 OBLIGATIONS SECURED. The security interest created
hereby in the Collateral constitutes continuing collateral security for all
of the following obligations, indebtedness and liabilities, whether now
existing or hereafter incurred:
(a) CREDIT AGREEMENT INDEBTEDNESS. The payment, as and when due and
payable, of all amounts from time to time owing by Debtor or Borrower
under or in respect of the Credit Agreement, the Notes or any of the
other Obligation Documents.
(b) HEDGING OBLIGATIONS. All present or future "Hedging Obligations"
incurred or owing by Debtor to any Bank. As used in this Section 2.2,
"Hedging Obligations" means any indebtedness or obligations, however
arising, to make payments or take actions under or pursuant to any
present or future agreement (including any individual agreement or any
master agreement and the various transactions and confirmations made
thereunder) governing any swap, put, call, cap, floor or collar
transaction, or other type of agreement or transaction relating to
interest rates, currency exchange rates, or the price or delivery (at
any one or more locations or in any one or more markets) of crude oil,
natural gas, petroleum products, other hydrocarbons, agricultural
products, precious metals, stocks or bonds or indices thereof, or any
other commodity, contract or other item of property traded in any
market, and all interest thereon and expenses and other amounts
payable in connection therewith.
(c) RENEWALS. All renewals, extensions, amendments, modifications,
supplements, or restatements of or substitutions for any of the
foregoing.
(d) PERFORMANCE. The due performance and observance of all other
obligations of Debtor or Borrower from time to time existing under or
in respect of any of the Obligation Documents.
(e) GUARANTY. The payment by Debtor, as and when due and payable, of
all amounts from time to time owing by it under or in respect of the
Guaranty.
As used herein, the term "SECURED OBLIGATIONS" refers to all
present and future indebtedness, obligations, and liabilities of
whatever type which are described above in this section, including any
interest which accrues after the commencement of any case, proceeding,
or other action relating to the bankruptcy, insolvency, or
reorganization of the Debtor. Debtor hereby acknowledges that the
Secured Obligations are owed to the various Lenders and that each
Lender is entitled to the benefits of the Liens given under this
Agreement."
17
ARTICLE III.
CONDITIONS OF EFFECTIVENESS
Section 3.1. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when and only when (i) Agent shall
have received, at Agent's office, a counterpart of this Amendment executed and
delivered by Borrower, (ii) Borrower shall have issued and delivered to Agent
promissory notes with appropriate insertions in the forms attached hereto as
Exhibits ▇-▇, ▇-▇, and A-3 (such notes being herein collectively called the
"Renewal Note") duly executed on behalf of Borrower, dated the date hereof, and
expressly renewing the Original Note, and (iii) Agent shall have additionally
received all of the following documents, each document (unless otherwise
indicated) being dated the date of receipt thereof by Agent, duly authorized,
executed and delivered, and in form and substance satisfactory to Agent:
(a) OPINION OF COUNSEL FOR RELATED PERSONS. A written opinion of
Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., counsel for Related Persons, dated as of the
date of this Amendment, addressed to Agent, to the effect that the
Amendment Documents have been duly authorized, executed and delivered by
each Related Person to the extent each is a party thereto and that the
Credit Agreement and the Amendment Documents constitute the legal, valid
and binding obligations of each Related Person to the extent each is a
party thereto, enforceable in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency and similar laws and to general principles of equity), and such
other matters as may be requested.
(b) OFFICER'S CERTIFICATE. A certificate of a duly authorized
officer of Borrower to the effect that all of the representations and
warranties set forth in Article IV hereof are true and correct at and as of
the time of such effectiveness.
(c) SUPPORTING DOCUMENTS. (i) A certificate of the Secretary of each
Related Person dated the date of this Amendment certifying that attached
thereto is a true and complete copy of resolutions adopted by the Board of
Directors of such Related Person authorizing the execution, delivery and
performance of the Amendment Documents to the extent that each Related
Person is a party thereto and certifying the names and true signatures of
the officers of such Related Person authorized to sign the Amendment
Documents and (ii) such supporting documents as Agent may reasonably
request.
Section 3.2. CONDITIONS REGARDING PARIBAS FACILITY REPAYMENT DATE. The
Paribas Facility Repayment Date shall occur only when Agent shall have received
all of the following documents, each document (unless otherwise indicated) being
dated the date of receipt thereof by Agent, duly authorized, executed and
delivered, and in form and substance satisfactory to Agent:
(a) OPINION OF COUNSEL FOR RELATED PERSONS. A written opinion of
Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., counsel for Related Persons, dated as of the
Paribas Facility Repayment Date, addressed to Agent, to the effect that the
documents described in paragraph (d) of this Section 3.2 have been duly
authorized, executed and delivered by each Related Person to the extent
each is a party thereto and that the Credit Agreement and such documents
18
constitute the legal, valid and binding obligations of each Related Person
to the extent each is a party thereto, enforceable in accordance with their
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency and similar laws and to general principles of
equity), and such other matters as may be requested.
(b) OFFICER'S CERTIFICATE. A certificate of a duly authorized
officer of Borrower to the effect that all of the representations and
warranties set forth in Article IV hereof are true and correct at and as of
the occurrence of such Paribas Facility Repayment Date.
(c) SUPPORTING DOCUMENTS. (i) A certificate of the Secretary of each
Related Person dated as of the Paribas Facility Repayment Date certifying
attached thereto is a true and complete copy of resolutions adopted by the
Board of Directors of such Related Person authorizing the execution,
delivery and performance of the documents described in paragraph (d) of
this Section 3.2 to the extent that each Related Person is a party thereto
and certifying the names and true signatures of the officers of such
Related Person authorized to sign the such documents and (ii) such
supporting documents as Agent may reasonably request.
(d) REFINING SECURITY DOCUMENTS. (i) a first priority security
agreement executed by Inland Refining as debtor and naming Agent as secured
party for the benefit of Banks and granting a first priority security
interest to Agent for the benefit of Banks in all assets of Inland
Refining, (ii) a first priority deed of trust, mortgage, security agreement
and financing statement covering the Crysen Refinery and such other assets
of Inland Refining which Banks may specify, (iii) an amendment to the
Pledge Agreement of Parent granting a first priority security interest in
the stock of Inland Refining and in all other securities owned from time to
time by Parent, (iv) UCC-1 financing statements required to be filed in
order to perfect the security interests granted pursuant to the security
agreement described in the immediately preceding subsection (i), the deed
of trust and mortgage described in the immediately preceding subsection
(ii), and the amendment to the Pledge Agreement of Parent described in the
immediately preceding subsection (iii), (v) UCC searches naming Inland
Refining as debtor certified by the Secretary of State of each state in
which collateral that is subject to the documents described in the
preceding subsections (i), (ii), and (iii) is located, (vi) the
Production/Refining Credit Agreement, (vii) title insurance in respect to
the deed of trust and mortgage described in the immediately preceding
subsection (ii) in such form and amount as may be requested by Agent,
(viii) evidence acceptable to Agent in its sole discretion that (A) the
Refining Loan has been paid in full and the credit agreement governing the
Refining Loan has been terminated and (B) all Liens securing the Refining
Loan have been terminated and released, and (ix) such other documents as
may be requested by Agent in connection with the foregoing.
(e) SECOND AMENDMENT TO TCW CREDIT AGREEMENT. Evidence acceptable to
Agent in its sole discretion that all of the conditions of effectiveness to
certain portions of the Second Amendment to the TCW Credit Agreement as set
forth in Section 3.2 thereof have been satisfied.
19
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF BORROWER AND PARENT. In
order to induce Banks to enter into this Amendment, Borrower and Parent each
represent and warrant to Banks that:
(a) The representations and warranties contained in Section 4.1 of
the Original Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) Borrower and Parent are each duly authorized to execute and
deliver this Amendment, and Borrower is and will continue to be duly
authorized to borrow and to perform its obligations under the Credit
Agreement. Borrower and Parent have each duly taken all action necessary
to authorize the execution and delivery of this Amendment and to authorize
the performance of the obligations of Borrower and Parent hereunder.
(c) The execution and delivery by Borrower and Parent of this
Amendment, the performance by Borrower and Parent of their respective
obligations hereunder and the consummation of the transactions contemplated
hereby do not and will not conflict with any provision of law, statute,
rule or regulation or of the organizational documents of either Borrower or
Parent, or of any material agreement, judgment, license, order or permit
applicable to or binding upon Borrower or Parent, or result in the creation
of any lien, charge or encumbrance upon any assets or properties of
Borrower or Parent. Except for those which have been duly obtained, no
consent, approval, authorization or order of any court or governmental
authority or third party is required in connection with the execution and
delivery by Borrower and Parent of this Amendment or to consummate the
transactions contemplated hereby.
(d) When duly executed and delivered, each of this Amendment and the
Credit Agreement will be a legal and binding instrument and agreement of
Borrower and Parent, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency and similar laws applying to creditors'
rights generally and by principles of equity applying to creditors' rights
generally.
(e) The audited annual Consolidated financial statements of Parent
dated as of December 31, 1997 fairly present the Consolidated financial
position at such date and the Consolidated statement of operations and the
changes in the Consolidated financial position for the period ending on
such date for Borrower. Copies of such financial statements have
heretofore been delivered to Banks. Since December 31, 1997, no material
adverse change has occurred in the Consolidated financial condition or
businesses of Parent.
(f) No Default of Event of Default exists on the date hereof.
20
ARTICLE V.
MISCELLANEOUS
Section 5.1. RATIFICATION OF AGREEMENTS. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein or therein, operate as a waiver of any right, power or remedy of
Banks under the Credit Agreement or any other Loan Document nor constitute a
waiver of any provision of the Credit Agreement or any other Loan Document.
Section 5.2. SURVIVAL OF AGREEMENTS. All representations, warranties,
covenants and agreements of Borrower and Parent herein shall survive the
execution and delivery of this Amendment and the performance hereof, and shall
further survive until all of the Obligations are paid in full. All statements
and agreements contained in any certificate or instrument delivered by Borrower
hereunder or under the Credit Agreement to Banks shall be deemed to constitute
representations and warranties by, or agreements and covenants of, Borrower
under this Amendment and under the Credit Agreement.
Section 5.3. LOAN DOCUMENTS. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto.
Section 5.4. RETURN OF ORIGINAL NOTES. Promptly following receipt of the
Renewal Notes, Banks shall promptly ▇▇▇▇ each Original Note as being renewed and
return each Original Note to Borrower.
Section 5.5. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
Section 5.6. 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 LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
21
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
INLAND PRODUCTION COMPANY
By:
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
INLAND RESOURCES INC.
By:
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
ING (U.S.) CAPITAL CORPORATION, as a Bank
and as Agent
By:
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
22
U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
Title:
MEESPIERSON CAPITAL CORP.
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
23
CONSENT AND AGREEMENT
Pursuant to the terms of that certain Intercreditor Agreement dated
September 23, 1997, as amended, among Borrower, Parent, Agent, the Banks, the
Noteholder named therein, and the undersigned Agent Noteholder, the
undersigned hereby consents to the foregoing Third Amendment to Credit
Agreement:
Agent Noteholder: TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under that
certain Agreement dated as of June 13, 1994,
between TCW Asset Management and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Group, Inc.
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
By:
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
24
CONSENT AND AGREEMENT
Parent and Inland Refining hereby consent to the provisions of this
Amendment and the transactions contemplated herein, and hereby ratify and
confirm their respective Guaranty dated as of September 23, 1997, made by
them for the benefit of Agent, and agree that their obligations and covenants
thereunder are unimpaired hereby and shall remain in full force and effect.
INLAND RESOURCES INC.
By:
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
INLAND REFINING, INC.
By:
-----------------------------------------
▇▇▇▇ ▇▇▇▇
President
25
Exhibit A-1 PROMISSORY NOTE
$30,769,230.76 New York, New York April 22, 1998
FOR VALUE RECEIVED, the undersigned, Inland Production Company, a Texas
corporation, (herein called "Borrower"), hereby promises to pay to the order
of ING (U.S.) Capital Corporation, a Delaware corporation (herein called
"Bank"), the principal sum of Thirty Million Seven Hundred Sixty Nine
Thousand Two Hundred Thirty and 76/100 Dollars ($30,769,230.76), or, if
greater or less, the aggregate unpaid principal amount of the Loan made under
this Note by Bank to Borrower pursuant to the terms of the Credit Agreement
(as hereinafter defined), together with interest on the unpaid principal
balance thereof as hereinafter set forth, both principal and interest payable
as herein provided in lawful money of the United States of America at the
offices of the Agent under the Credit Agreement, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other place as from time to time may be designated
by the holder of this Note.
This Note (a) is issued and delivered under that certain Credit
Agreement dated September 23, 1997 among Borrower, Inland Resources Inc., ING
(U.S.) Capital Corporation, as Agent, and the Banks (including Bank) referred
to therein (herein, as from time to time supplemented, amended or restated,
called the "Credit Agreement"), and is a "Note" as defined therein, (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payments and prepayments hereunder and acceleration of the
maturity hereof upon the happening of certain stated events, and (c) is
secured by and entitled to the benefits of certain Security Documents (as
identified and defined in the Credit Agreement). Payments on this Note shall
be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto
and for the meanings assigned to terms used and not defined herein and to the
Security Documents for a description of the nature and extent of the security
thereby provided and the rights of the parties thereto.
For the purposes of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) each Quarterly Payment Date,
beginning June 30, 1998, and (ii) any day on which past due interest or
principal is owed hereunder and is unpaid. If the terms hereof or of the
Credit Agreement provide that payments of interest or principal hereon
shall be deferred from one Base Rate Payment Date to another day, such
other day shall also be a Base Rate Payment Date.
"Eurodollar Rate Payment Date" means, with respect to any Eurodollar
Loan: (i) the day on which the related Interest Period ends (and, if such
Interest Period is three months or longer, the three-month anniversary of
the first day of such Interest Period), and (ii) any day on which past due
interest or past due principal is owed hereunder with respect to such
Eurodollar Loan and is unpaid. If the terms hereof or of the Credit
Agreement provide that payments of interest or principal with respect to
such Eurodollar
Loan shall be deferred from one Eurodollar Rate Payment Date to another
day, such other day shall also be a Eurodollar Rate Payment Date.
The principal amount of this Note shall be due and payable quarterly as
provided in the Credit Agreement. On March 29, 2003, the unpaid principal
balance of this Note and all interest accrued hereon shall be due and payable
in full.
Base Rate Loans (exclusive of any past due principal or interest) from
time to time outstanding shall bear interest on each day outstanding at the
Base Rate in effect on such day. On each Base Rate Payment Date Borrower
shall pay to the holder hereof all unpaid interest which has accrued on the
Base Rate Loans to but not including such Base Rate Payment Date. Each
Eurodollar Loan (exclusive of any past due principal or interest) shall bear
interest on each day during the related Interest Period at the related
Eurodollar Rate in effect on such day. On each Eurodollar Rate Payment Date
relating to such Eurodollar Loan, Borrower shall pay to the holder hereof all
unpaid interest which has accrued on such Eurodollar Loan to but not
including such Eurodollar Rate Payment Date. All past due principal of and
past due interest on the Loan shall bear interest on each day outstanding at
the Late Payment Rate in effect on such day, and such interest shall be due
and payable daily as it accrues.
Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum interest which, under applicable Law, may be
charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations
on how interest accrues hereon.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration
of the maturity of this Note, diligence in collecting, the bringing of any
suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
This Note is in renewal and extension, but not in extinguishment or
novation, of that certain promissory note made by Borrower payable to the
order of Bank in the original principal amount of $80,000,000 dated as of
September 23, 1997, as renewed and extended by that certain promissory note
made by Borrower payable to the order of Bank in the original principal
amount of $20,000,000 dated as of December 12, 1997.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, (WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY
APPLICABLE FEDERAL LAW.
INLAND PRODUCTION COMPANY
By:
-----------------------------------------
Name:
Title:
Exhibit A-2 PROMISSORY NOTE
$24,615,384.62 New York, New York April 22, 1998
FOR VALUE RECEIVED, the undersigned, Inland Production Company, a Texas
corporation, (herein called "Borrower"), hereby promises to pay to the order
of U.S. Bank National Association, a national banking association (herein
called "Bank"), the principal sum of Twenty Four Million Six Hundred Fifteen
Thousand Three Hundred Eighty Four and 62/100 Dollars ($24,615,384.62), or,
if greater or less, the aggregate unpaid principal amount of the Loan made
under this Note by Bank to Borrower pursuant to the terms of the Credit
Agreement (as hereinafter defined), together with interest on the unpaid
principal balance thereof as hereinafter set forth, both principal and
interest payable as herein provided in lawful money of the United States of
America at the offices of the Agent under the Credit Agreement, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other place as from time to time may be
designated by the holder of this Note.
This Note (a) is issued and delivered under that certain Credit
Agreement dated September 23, 1997 among Borrower, Inland Resources Inc., ING
(U.S.) Capital Corporation, as Agent, and the Banks (including Bank) referred
to therein (herein, as from time to time supplemented, amended or restated,
called the "Credit Agreement"), and is a "Note" as defined therein, (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payments and prepayments hereunder and acceleration of the
maturity hereof upon the happening of certain stated events, and (c) is
secured by and entitled to the benefits of certain Security Documents (as
identified and defined in the Credit Agreement). Payments on this Note shall
be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto
and for the meanings assigned to terms used and not defined herein and to the
Security Documents for a description of the nature and extent of the security
thereby provided and the rights of the parties thereto.
For the purposes of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) each Quarterly Payment Date,
beginning June 30, 1998, and (ii) any day on which past due interest or
principal is owed hereunder and is unpaid. If the terms hereof or of the
Credit Agreement provide that payments of interest or principal hereon
shall be deferred from one Base Rate Payment Date to another day, such
other day shall also be a Base Rate Payment Date.
"Eurodollar Rate Payment Date" means, with respect to any Eurodollar
Loan: (i) the day on which the related Interest Period ends (and, if such
Interest Period is three months or longer, the three-month anniversary of
the first day of such Interest Period), and (ii) any day on which past due
interest or past due principal is owed hereunder with respect to such
Eurodollar Loan and is unpaid. If the terms hereof or of the Credit
Agreement provide that payments of interest or principal with respect to
such Eurodollar
Loan shall be deferred from one Eurodollar Rate Payment Date to another
day, such other day shall also be a Eurodollar Rate Payment Date.
The principal amount of this Note shall be due and payable quarterly as
provided in the Credit Agreement. On March 29, 2003, the unpaid principal
balance of this Note and all interest accrued hereon shall be due and payable
in full.
Base Rate Loans (exclusive of any past due principal or interest) from
time to time outstanding shall bear interest on each day outstanding at the
Base Rate in effect on such day. On each Base Rate Payment Date Borrower
shall pay to the holder hereof all unpaid interest which has accrued on the
Base Rate Loans to but not including such Base Rate Payment Date. Each
Eurodollar Loan (exclusive of any past due principal or interest) shall bear
interest on each day during the related Interest Period at the related
Eurodollar Rate in effect on such day. On each Eurodollar Rate Payment Date
relating to such Eurodollar Loan, Borrower shall pay to the holder hereof all
unpaid interest which has accrued on such Eurodollar Loan to but not
including such Eurodollar Rate Payment Date. All past due principal of and
past due interest on the Loan shall bear interest on each day outstanding at
the Late Payment Rate in effect on such day, and such interest shall be due
and payable daily as it accrues.
Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum interest which, under applicable Law, may be
charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations
on how interest accrues hereon.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration
of the maturity of this Note, diligence in collecting, the bringing of any
suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
This Note is in renewal and extension, but not in extinguishment or
novation, of that certain promissory note made by Borrower payable to the
order of Agent in the original principal amount of $80,000,000 dated as of
September 23, 1997, as renewed and extended by that certain promissory note
made by Borrower payable to the order of Bank in the original principal
amount of $12,500,000 dated as of December 12, 1997.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
INLAND PRODUCTION COMPANY
By:
-----------------------------------------
Name:
Title:
PROMISSORY NOTE
Exhibit A-3
$24,615,384.62 New York, New York April 22, 1998
FOR VALUE RECEIVED, the undersigned, Inland Production Company, a Texas
corporation, (herein called "Borrower"), hereby promises to pay to the order
of MeesPierson Capital Corp. (herein called "Lender"), the principal sum of
Twenty Four Million Six Hundred Fifteen Thousand Three Hundred Eighty Four
and 62/100 Dollars ($24,615,384.62), or, if greater or less, the aggregate
unpaid principal amount of the Loan made under this Note by Lender to
Borrower pursuant to the terms of the Credit Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided
in lawful money of the United States of America at the offices of the Agent
under the Credit Agreement, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at
such other place as from time to time may be designated by the holder of this
Note.
This Note (a) is issued and delivered under that certain Credit
Agreement dated September 23, 1997 among Borrower, Inland Resources Inc., ING
(U.S.) Capital Corporation, as Agent, and the Banks (including Lender)
referred to therein (herein, as from time to time supplemented, amended or
restated, called the "Credit Agreement"), and is a "Note" as defined therein,
(b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payments and prepayments hereunder and acceleration
of the maturity hereof upon the happening of certain stated events, and (c)
is secured by and entitled to the benefits of certain Security Documents (as
identified and defined in the Credit Agreement). Payments on this Note shall
be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto
and for the meanings assigned to terms used and not defined herein and to the
Security Documents for a description of the nature and extent of the security
thereby provided and the rights of the parties thereto.
For the purposes of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) each Quarterly Payment Date,
beginning June 30, 1998, and (ii) any day on which past due interest or
principal is owed hereunder and is unpaid. If the terms hereof or of the
Credit Agreement provide that payments of interest or principal hereon
shall be deferred from one Base Rate Payment Date to another day, such
other day shall also be a Base Rate Payment Date.
"Eurodollar Rate Payment Date" means, with respect to any Eurodollar
Loan: (i) the day on which the related Interest Period ends (and, if such
Interest Period is three months or longer, the three-month anniversary of
the first day of such Interest Period), and (ii) any day on which past due
interest or past due principal is owed hereunder with respect to such
Eurodollar Loan and is unpaid. If the terms hereof or of the Credit
Agreement provide that payments of interest or principal with respect to
such Eurodollar
Loan shall be deferred from one Eurodollar Rate Payment Date to another
day, such other day shall also be a Eurodollar Rate Payment Date.
The principal amount of this Note shall be due and payable quarterly as
provided in the Credit Agreement. On March 29, 2003, the unpaid principal
balance of this Note and all interest accrued hereon shall be due and payable
in full.
Base Rate Loans (exclusive of any past due principal or interest) from
time to time outstanding shall bear interest on each day outstanding at the
Base Rate in effect on such day. On each Base Rate Payment Date Borrower
shall pay to the holder hereof all unpaid interest which has accrued on the
Base Rate Loans to but not including such Base Rate Payment Date. Each
Eurodollar Loan (exclusive of any past due principal or interest) shall bear
interest on each day during the related Interest Period at the related
Eurodollar Rate in effect on such day. On each Eurodollar Rate Payment Date
relating to such Eurodollar Loan, Borrower shall pay to the holder hereof all
unpaid interest which has accrued on such Eurodollar Loan to but not
including such Eurodollar Rate Payment Date. All past due principal of and
past due interest on the Loan shall bear interest on each day outstanding at
the Late Payment Rate in effect on such day, and such interest shall be due
and payable daily as it accrues.
Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum interest which, under applicable Law, may be
charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations
on how interest accrues hereon.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration
of the maturity of this Note, diligence in collecting, the bringing of any
suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
This Note is in renewal and extension, but not in extinguishment or
novation, of that certain promissory note made by Borrower payable to the
order of Agent in the original principal amount of $80,000,000 dated as of
September 23, 1997, as renewed and extended by that certain promissory note
made by Borrower payable to the order of Lender in the original principal
amount of $12,500,000 dated as of December 12, 1997.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
INLAND PRODUCTION COMPANY
By:
-----------------------------------------
Name:
Title:
Exhibit G
Schedule 1
BANK SCHEDULE
Bank Percentage of Note Amount
Borrowing Base
--------------
ING (U.S.) Capital Corporation 38.46153846% $30,769,230.76
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
U.S. Bank National Association 30.76923077% $24,615,384.62
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MeesPierson Capital Corp. 30.76923077% $24,615,384.62
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attachment C-1
1. The following amendments to Annex C of the Original Agreement shall
become effective on the effective date of this Amendment without regard to
the Paribas Facility Repayment Date:
(a) Section C.29 of Annex C to the Original Agreement is hereby amended
in its entirety to read as follows:
"Section C.29 EBITDA. At the end of any Fiscal Quarter, the ratio of
(a) EBITDA to (b) the required interest payments on Parent's Consolidated
Debt, for the four-Fiscal Quarter period ending such Fiscal Quarter, will not
be less than 1.7 to 1.0 for any such period ending on or prior to December
31, 1998, and not less than 3.0 to 1.0 for any period ending after such date."
(b) Section C.41 of Annex C to the Credit Agreement is hereby amended
in its entirety to read as follows:
"Section C.41 LIENS. Upon the request of Agent or on the Paribas
Facility Repayment Date, whichever occurs first, Parent will grant Agent a
lien on and security interest in the capital stock of Inland Refining, which
lien and security interest shall be subject to the Intercreditor Agreement."
(c) Annex C of the Original Agreement is hereby amended by adding the
following Section C.42 to read in its entirety as follows:
"Section C.42. ADDITIONAL EQUITY AND FARMOUT TRANSACTIONS. By June 30,
1998, Parent shall have received at least $15,000,000 in proceeds from the
issuance of Series D Convertible Preferred Stock or other equity
securities or farmout transactions, in either case on terms acceptable to
Required Lenders in their sole discretion. Upon the issuance of such
Series D Convertible Preferred Stock or such other equity or the
consummation of a farmout transaction, the references contained in Sections
C.18 and C.21 to 'Parent's Series C Convertible Preferred Stock' shall be
deemed to read 'Parent's Series C Convertible Preferred Stock and Series D
Convertible Preferred Stock or other equity securities or farmout
transactions issued or entered into in compliance with Section C.42.'"
Attachment C-2
1. The following amendment to Annex C of the Original Agreement shall become
effective on the Paribas Facility Repayment Date:
(a) Section C.18 of Annex C to the Credit Agreement is hereby amended
by deleting subsection (g) and replacing it with the following, adding the
following subsection (h) and redesignating the existing subsection (h) as
subsection (i) and amending such subsection as follows:
"(g) the Debt of Inland Refining evidenced by the Production/Refining
Credit Agreement, provided that the principal amount of such Debt thereof
(including without limitation advances and the face amount of letters of
credit) shall not exceed $20,000,000 at any time outstanding.
(h) guaranties by Parent, in form and substance acceptable to Required
Lenders in their sole discretion, of obligations of Inland Refining under
agreements for the purchase of refinery feed stocks in the ordinary course
of business; provided, however, that each such guaranty shall specify a
maximum aggregate liability for Parent under such guaranty, and the maximum
aggregate amount of such specified maximum liability of Parent under all
such guaranties shall not exceed $6,000,000 at any one time.
(i) miscellaneous items of Restricted Debt not described in
subsections (a) through (h) which do not in the aggregate (taking into
account all such Restricted Debt of all Related Persons) exceed $150,000 at
any one time outstanding."
(b) Section C.19 of Annex C to the Credit Agreement is hereby amended by
deleting subsections (d), (e) and (f) and replacing subsection (d) with the
following:
"(d) Liens securing the Restricted Debt permitted by Section C.18 (d),
(e) or (i) of this Annex C."
(c) Section C.21 of Annex C to the Credit Agreement is hereby amended to
read in its entirety as follows:
"Section C.21. LIMITATION ON DIVIDENDS AND REDEMPTIONS. No Related
Person will make any Distribution in respect of any class of its capital stock
or any partnership or other interest in it, nor will any Related Person directly
or indirectly make any Distribution in respect of any shares of the capital
stock of or partnership interests in any Related Person (whether such interests
are now or hereafter issued, outstanding or created), or cause or permit any
reduction or retirement of the capital stock of any Related Person, except that
(a) Parent may at any time make Distributions in the form of Parent's common
stock to the holders of Parent's Series C Convertible Preferred Stock, (b)
Borrower may make a Distribution to Parent in the amount of $9,250,000 to enable
Parent to make the capital contribution to Inland Refining described in Section
C.23 of this Annex C, (c) Inland Refining may at any time make payments to
Borrower
pursuant to the Production/Refining Credit Agreement, and (d) Inland Refining
may make any other Distribution or loan either in favor of or for the benefit
of Borrower or Parent for the purpose of applying such Distribution to
Affiliates' ANCF, as contemplated by Section 3 of the Intercreditor
Agreement."
(d) Section C.23 of Annex C to the Credit Agreement is hereby amended by
adding the following subsection (g):
"and (g) the Production/Refining Loan."
(e) Section C.25 of Annex C to the Credit Agreement is hereby amended by
adding the following as subsections (viii) and (ix):
"(viii) the Production/Refining Loan, and (ix) the Parent guaranties set
forth in Section C.18(h)."
(f) Section C.36 of Annex C to the Credit Agreement is hereby amended by
deleting the introductory language and subsection (a) and replacing it with the
following:
"With respect to Inland Refining, neither Parent nor Borrower shall (a)
either directly or indirectly, provide any additional funds to Inland
Refining, either through an equity investment, loan, loan guarantee or any
other means, except for (i) the $9,250,000 capital contribution permitted
pursuant to Section C.23(c), (ii) the Production/Refining Credit Agreement
permitted pursuant to Section C.23(g) and (iii) the Parent guaranties
permitted pursuant to Section C.23(h),".
(g) Section C.38 of Annex C to the Original Agreement is hereby deleted
and replaced with the following new Section C.38:
"Section C.38 PRODUCTION/REFINING LOAN AND REFINING LOAN. Upon the
termination of the Refining Credit Agreement, the provision of Sections
C.18 and C.19 permitting the Refining Loan and the Liens securing the
Refining Loan shall no longer apply. At any time and from time to time
after the termination of the Refining Credit Agreement, notwithstanding
anything to the contrary contained in this Annex C, including without
limitation Sections C.23 or C.25, Borrower shall be permitted to make loans
or advances to Inland Refining, and may cause Letters of Credit to be
issued for the benefit of Inland Refining pursuant to the Bank Agreement,
in each case under the Production/Refining Credit Agreement, provided that
the aggregate principal amount of all loans to Inland Refining plus the
aggregate amount of Letters of Credit issued to or for the account of
Inland Refining, plus any amounts that have been advanced pursuant to any
such Letter of Credit which have not been reimbursed by Inland Refining to
Borrower, shall not exceed $20,000,000 in the aggregate at any one time
outstanding."