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EXHIBIT 10.21
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Second Amendment") is
entered into as of the 11th day of February, 2000, by and among EXCO Resources,
Inc., a Texas corporation ("Borrower"), Bank of America, N.A. (successor by
merger to NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.),
as Agent ("Agent"), and Bank of America, N.A. (successor by merger to
NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.) as the
sole Bank ("Bank").
W I T N E S S E T H
WHEREAS, Borrower, Agent and Bank are parties to that certain Credit
Agreement dated as of February 11, 1998 (as amended, by the First Amendment to
Credit Agreement dated September 21, 1998, the "Credit Agreement") (unless
otherwise defined herein, all terms used herein with their initial letter
capitalized shall have the meaning given such terms in the Credit Agreement);
and
WHEREAS, pursuant to the Credit Agreement, Bank has made a Revolving
Loan to Borrower and provided certain other credit accommodations to Borrower;
and
WHEREAS, Borrower has requested that the Borrowing Base be increased
and other provisions in the Credit Agreement be amended; and
WHEREAS, subject to and upon the terms and conditions set forth herein,
Bank has agreed to Borrower's requests.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrower, Agent and Bank hereby agree as follows:
SECTION 1 Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this Second Amendment, the Credit
Agreement shall be amended effective as of the date hereof in the manner
provided in this SECTION 1.
1.1 Additional Definitions. Section 1.1 of the Credit Agreement
shall be amended to add the definition of "Second Amendment" which shall read in
full as follows:
"Second Amendment" means that certain Second Amendment to Credit
Agreement dated as of February 11, 2000 among Borrower, Agent and Bank.
1.2 Amendment to Definitions. The definitions of "Agent", "Loan
Papers" and "Termination Date" contained in Section 1.1 of the Credit Agreement
shall be amended to read in full as follows:
"Agent" means Bank of America, N.A., successor by merger to
NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.,
in its capacity as agent for Banks hereunder or any successor thereto.
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"Loan Papers" means this Agreement, the First Amendment, the
Second Amendment, the Notes, all Mortgages now or at any time hereafter
delivered pursuant to Section 6.1, and all other certificates,
documents or instruments delivered in connection with this Agreement,
as the foregoing may be amended from time to time.
"Termination Date" means February 11, 2002.
1.3 Letters of Credit. Section 2.1(b) of the Credit Agreement
shall be amended by deleting the first sentence thereto and adding the following
sentence in place thereof:
"Agent will, from time to time prior to the Termination Date, upon
request by Borrower issue Letters of Credit for the account of
Borrower, so long as (i) the sum of (A) the total of Letter of Credit
Exposure then existing, and (B) the amount of the requested Letter of
Credit does not exceed $500,000, and (ii) Borrower would be entitled
to a Borrowing under Sections 2.1(a) and 2.1(c) in the amount of the
requested Letter of Credit".
1.4 Additional Funding Condition. Section 7.2 of the Credit
Agreement shall be amended (a) to delete "and" at the end of the clause (e)
thereof, (b) to delete the period (".") at the end of clause (f) thereof and
replace such period with "; and", and (c) to insert a new clause (g) which shall
read in full as follows:
(g) in the case of any Borrowing or issuance of any Letter of Credit
which would cause the Outstanding Credit to exceed $6,500,000,
Borrower shall deliver to Administrative Agent a legal opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to Borrower, addressed to
Administrative Agent regarding (a) the valid organization and
existence of Borrower, (b) the due authorization, execution and
delivery of this Agreement and the other Loan Papers, (c) the
validity, enforceability and binding effect of this Agreement and the
other Loan Papers, and (d) such other matters as Administrative Agent
shall request.
1.5 Net Revenue Reports. Section 9.1(d) of the Credit Agreement
shall be amended to read in full as follows:
"(d) As soon as available and in any event in thirty (30) days after
the end of each calendar month, a report of Borrower's Financial
Officer setting forth in reasonable detail Borrower's Net Revenues for
the preceding calendar month;"
1.6 Environmental Reporting Threshold. Section 9.1(g) of the
Credit Agreement shall be amended to delete "$50,000" each time it appears
therein and to substitute "$100,000" in place thereof.
1.7 Waiver of Production Reports. Section 9.1(j) of the Credit
Agreement shall be deleted in its entirety.
1.8 Debt Covenant. Section 10.1 of the Credit Agreement shall be
amended to
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delete "$100,000" where it appears therein and to substitute "$500,000" in place
thereof.
1.9 Asset Disposition Covenant. Section 10.5 of the Credit
Agreement shall be amended to delete "$100,000" where it appears therein and to
substitute "$500,000" in place thereof.
1.10 Use of Proceeds Covenant. The first sentence of Section 10.7
of the Credit Agreement shall be amended to read in full as follows:
"The proceeds of Borrowings will not be used for any purpose other
than (a) the acquisition, exploration and development of Mineral
Interests, and (b) general corporate purposes not prohibited by any
other provision of this Agreement or other Loan Papers."
1.11 Judgment Defaults. Section 12.1(i) of the Credit Agreement
shall be amended to delete "$100,000" where is appears therein and to substitute
"$250,000" in place thereof.
1.12 Events of Default. Article XII of the Credit Agreement shall
be amended by deleting the word "or" in Section 12.1(m), deleting the period "."
in Section 12.1(n) and inserting in lieu thereof "; or" and by adding a new
Section 12.1(o), which shall read in full as follows:
"(o) (i) the ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of shares
representing fifty percent (50%) or more of the aggregate ordinary
voting power represented by the issued and outstanding capital stock
of Borrower; or (ii) as of any date, more than fifty percent (50%) of
the Persons comprising the Board of Directors of Borrower were not
members of the Board of Directors of Borrower one year prior to such
date;"
SECTION 2 Limited Waiver of Restricted Payment Covenant. Bank hereby
waives compliance by Borrower with Section 10.2 of the Credit Agreement for the
limited purpose of permitting Borrower to make Restricted Payments in an
aggregate amount not exceeding $250,000 to complete odd lot share repurchases of
Borrower's common stock (the "Odd Lot Purchase Program"). This waiver is limited
solely to the Odd Lot Purchase Program. Nothing contained herein shall be
construed as a waiver of Section 10.2 of the Credit Agreement for any other
purpose or be construed as a waiver of any other provision of the Credit
Agreement or any other Loan Paper. Neither any Bank nor the Agent shall have any
obligation to grant any additional or subsequent waiver of any provision of the
Credit Agreement.
SECTION 3 Borrowing Base Effective as of the Second Amendment Effective
Date. In reliance on the representations, warranties, covenants and agreements
contained in this Second Amendment, upon the satisfaction of each condition
precedent set forth in SECTION 4 hereof (evidenced by a written notice to that
effect from Administrative Agent to Borrower), the Borrowing Base shall be
increased from $5,500,000 to $13,000,000 and shall remain at $13,000,000 until
the next Redetermination thereafter.
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SECTION 4 Conditions Precedent to Increase of Borrowing Base. The
increase in the Borrowing Base pursuant to SECTION 3 hereof is subject to the
satisfaction of each of the following conditions precedent on or before February
29, 2000:
4.1 Completion of Western Gas Acquisition. Borrower shall have
completed the acquisition of the Western Gas Properties substantially in
accordance with that certain Purchase and Sale Agreement dated November 16,
1999, by and between Borrower and Western Gas Resources, Inc. (the "Western Gas
Acquisition Agreement"). As used herein, the term "Western Gas Properties" means
the Mineral Interests to be acquired by Borrower pursuant to the Western Gas
Acquisition Agreement.
4.2 Additional Security. To the extent required by Section 6.1 of
the Credit Agreement, Borrower shall execute and deliver to Agent, for the
ratable benefit of each Bank, Mortgages in form and substance acceptable to
Agent granting, evidencing and perfecting a first and prior Lien (subject only
to Permitted Encumbrances) covering and encumbering Proved Mineral Interests
owned by Borrower which are not the subject of existing valid, enforceable,
perfected first priority Liens (subject to Permitted Encumbrances) in favor of
Agent for the ratable benefit of each Bank (including, without limitation, the
Western Gas Properties) (the "Incremental Properties").
4.3 Title Review. Agent or its counsel shall have completed a
review of title (including opinions of title) to Incremental Properties selected
by Borrower which are acceptable to Agent which review results in Agent and its
counsel having reviewed title to Proved Mineral Interests with a Recognized
Value equal to or not less than ninety percent (90%) of the Recognized Value of
all Proved Mineral Interests owned by Borrower. Such review shall not have
revealed any condition or circumstance which would reflect that the
representations and warranties contained in Section 8.9 of the Credit Agreement
are inaccurate in any respect.
4.4 Resolutions. Borrower shall provide Agent with copies of
resolutions and comparable authorizations approving this Second Amendment and
any other Loan Papers to be executed or delivered pursuant hereto and
authorizing the transactions contemplated by this Second Amendment and any other
Loan Papers to be executed or delivered pursuant hereto, duly adopted by the
Board of Directors of Borrower accompanied by a certificate of the Secretary or
comparable Authorized Officer of Borrower that such copies are true and correct
copies of resolutions duly adopted at a meeting of or (if permitted by
applicable Law and, if required by such Law, by the Bylaws of Borrower) by the
unanimous written consent of the Board of Directors of Borrower, and that such
resolutions constitute all the resolutions adopted with respect to such
transactions, have not been amended, modified or revoked in any respect, and are
in full force and effect as of the date hereof.
4.5 No Default. No Default or Event of Default shall have
occurred which is continuing.
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SECTION 5 Post Effectiveness Covenants. On or before February 29, 2000,
Borrower shall take all action required under Section 6.1 of the Credit
Agreement to cause Borrower to be in full compliance with such Section as of
such date. Borrower's failure to timely comply with this SECTION 5 shall
constitute an Event of Default.
SECTION 6 Representations and Warranties of Borrower. To induce Banks
and Agent to enter into this Second Amendment, Borrower hereby represents and
warrants to Banks and Agent as follows:
6.1 Reaffirm Existing Representations and Warranties. Each
representation and warranty of Borrower contained in the Credit Agreement and
the other Loan Papers is true and correct on the date hereof and will be true
and correct after giving effect to the amendments set forth in SECTION 1 hereof.
6.2 Due Authorization; Non Conflict. The execution, delivery and
performance by Borrower of this Second Amendment are within Borrower's corporate
powers, have been duly authorized by all necessary action, require no action by
or in respect of, or filing with, any governmental body, agency or official and
do not violate or constitute a default under any provision of applicable law or
any Material Agreement binding upon Borrower or the Subsidiaries of Borrower or
result in the creation or imposition of any Lien upon any of the assets of
Borrower or the Subsidiaries of Borrower except Permitted Encumbrances.
6.3 Validity and Enforceability; Extension of Liens. This Second
Amendment constitutes the valid and binding obligation of Borrower enforceable
in accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditor's rights
generally, and (ii) the availability of equitable remedies may be limited by
equitable principles of general application.
6.4 No Default or Event of Default. No Default or Event of
Default has occurred which is continuing.
6.5 Western Gas Acquisition Documents. Borrower has provided each
Bank a true and correct copy of each of the Western Gas Acquisition Documents,
including all amendments and modifications thereto. No material rights or
obligations of any party to any of such Western Gas Acquisition Documents have
been waived and neither Borrower, any of its Subsidiaries, nor, to the best
knowledge of Borrower, any other party to any of such Western Gas Acquisition
Documents, is in default of its obligations thereunder. Each of the Western Gas
Acquisition Documents is a valid, binding and enforceable obligation of the
parties thereto in accordance with its terms and is in full force and effect.
Each representation and warranty made by Borrower, and to the best knowledge of
Borrower, by Seller in the Western Gas Acquisition Agreement and the other
Western Gas Acquisition Documents (a) was true and correct when made, and (b)
will be true and correct on the Effective Date. As used herein, the term
"Western Gas Acquisition Documents" means the Western Gas Acquisition Agreement
and all agreements, assignments, deeds, conveyances, certificates and other
documents and instruments now or hereafter executed and delivered by or between
Borrower and Seller pursuant to the Western Gas Acquisition Agreement or in
connection with the acquisition of the Western Gas Properties.
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SECTION 7 Miscellaneous.
7.1 Satisfaction of Conditions Precedent. Borrower hereby
covenants and agrees that Borrower will satisfy or cause to be satisfied each
condition precedent contained in Sections 4.2, 4.3 and 4.4 hereof on or before
February 29, 2000; provided, that unless Borrower also satisfies the condition
precedent set forth in Section 4.1 hereof, for purposes of satisfying the
requirements of this Section 7.1, "Incremental Properties" shall not include the
Western Gas Properties. Borrower's failure to comply with this Section 7.1 on or
before February 29, 2000 shall constitute an Event of Default.
7.2 Reaffirmation of Loan Papers. Any and all of the terms and
provisions of the Credit Agreement and the Loan Papers shall, except as amended
and modified hereby, remain in full force and effect. The amendments
contemplated hereby shall not limit or impair any Liens securing the
Obligations, each of which are hereby ratified, affirmed and extended to secure
the Obligations as they may be increased pursuant hereto.
7.3 Parties in Interest. All of the terms and provisions of this
Second Amendment shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
7.4 Legal Expenses. Borrower hereby agrees to pay on demand all
reasonable fees and expenses of counsel to Administrative Agent incurred by
Administrative Agent, in connection with the preparation, negotiation and
execution of this Second Amendment and all related documents.
7.5 Counterparts. This Second Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this Second Amendment until all parties have executed a
counterpart. Facsimiles shall be effective as originals.
7.6 Complete Agreement. THIS SECOND AMENDMENT, THE CREDIT
AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
7.7 Headings. The headings, captions and arrangements used in
this Second Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this Second
Amendment, nor affect the meaning thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed by their respective authorized officers on the
date and year first above written.
BORROWER:
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EXCO RESOURCES, INC.,
a Texas corporation
By: /S/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President & CFO
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AGENT:
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BANK OF AMERICA, N.A., successor by merger
to NationsBank, N.A., successor by merger
to NationsBank of Texas, N.A., as Agent
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇,
Managing Director
BANK:
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BANK OF AMERICA, N.A., successor by merger
to NationsBank, N.A., successor by merger
to NationsBank of Texas, N.A., as Agent
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇,
Managing Director
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