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EXHIBIT 10.18
AMENDMENT NUMBER FIVE TO
AMENDED AND RESTATED CREDIT AGREEMENT
AND CONSENT AND WAIVER
This AMENDMENT NUMBER FIVE TO AMENDED AND RESTATED CREDIT
AGREEMENT AND CONSENT AND WAIVER (this "Amendment") is entered into as of
January 31, 2001, among DEVX ENERGY, INC., formerly known as Queen Sand
Resources, Inc., a corporation formed under the laws of the State of Delaware
("DEVX"); DEVX ENERGY, INC., formerly known as Queen Sand Resources, Inc., a
corporation formed under the laws of the State of Nevada ("Borrower"); each of
the lenders that is a signatory hereto (individually, a "Lender" and,
collectively, the "Lenders"); FOOTHILL CAPITAL CORPORATION, as administrative
agent for the Lenders (in such capacity, "Administrative Agent"); and ABLECO
FINANCE LLC, as collateral agent for the Lenders (in such capacity, "Collateral
Agent"), with reference to the following facts:
A. DEVX, Borrower, the Lenders signatory thereto,
Administrative Agent and Collateral Agent, heretofore have
entered into that certain Amended and Restated Credit
Agreement, dated as of October 22, 1999, as amended by that
certain Amendment Number One to Loan and Security Agreement,
dated as of May 23, 2000, as further amended by that certain
Amendment Number Two and Waiver and Consent to Loan and
Security Agreement, dated as of June 30, 2000, as further
amended by that certain Amendment Number Three to Amended and
Restated Credit Agreement, dated as of September 19, 2000, as
further amended by that certain Amendment Number Four and
Waiver and Consent to Loan and Security Agreement, dated as of
October 24, 2000 (as heretofore amended, supplemented, or
otherwise modified, the "Agreement").
B. Each of DEVX and Borrower has requested that the Lenders
(i) amend the Agreement to extend the Maturity Date from
October 22, 2001 to April 22, 2003; (ii) amend the Agreement
to modify the Applicable Margin; (iii) amend the Agreement to
modify the definition of Triggering Event; (iv) amend Section
8.11 of the Agreement to modify the hedging covenant; (v)
amend Section 9.07 of the Agreement to increase the non-oil &
gas lease payments limit and the oil & gas field operations
lease payments limit; (vi) amend Section 9.14 of the Agreement
to modify the asset disposition limit contained therein; (vii)
amend Section 9.22 of the Agreement to modify the capital
expenditures limits; and (xiii) consent to the sale of certain
properties, as described in more detail below and waive any
Event of Default that may be occasioned solely as a result of
such sale and release Collateral Agent's security interests in
such properties, as described in more detail below.
C. The Lenders, Collateral Agent, and Administrative Agent are
willing to (i) amend the Agreement to extend the Maturity Date
from October 22, 2001 to April 22, 2003; (ii) amend the
Agreement to modify the Applicable Margin; (iii) amend the
Agreement to modify the definition of Triggering Event, (iv)
amend Section
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8.11 of the Agreement to modify the hedging covenant; (v)
amend Section 9.07 of the Agreement to increase the non-oil &
gas lease payments limit and the oil & gas field operations
lease payments limit; (vi) amend Section 9.14 of the Agreement
to modify the asset disposition limit contained therein; (vii)
amend Section 9.22 of the Agreement to modify the capital
expenditures limits; and (xiii) consent to the sale of certain
properties, as described in more detail below and waive any
Event of Default that may be occasioned solely as a result of
such sale and release the Collateral Agent's security
interests in such properties, as described in more detail
below, all in accordance with the terms and conditions set
forth in this Amendment.
D. All capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Agreement, as
amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the
mutual premises contained herein, the Lenders signatory hereto, Administrative
Agent, Collateral Agent, DEVX, and Borrower hereby agree as follows:
1. AMENDMENTS TO THE AGREEMENT.
a. The following definitions contained in Section
1.02 of the Agreement are amended and restated in their entirety to read as
follows:
"Applicable Margin" shall mean, for each day a Loan is
outstanding, 2.00% per annum; provided, however, that, as of any date
of determination, in the event that (i) the Revolving Facility Usage is
equal to or greater than $30,000,000 and (ii) the ratio of (A) the
Dollar valuation of that component of the Borrowing Base determination
made under clause (b) of the definition thereof to (B) the Revolving
Facility Usage is less than 1.50 to 1:00, Applicable Margin shall mean
3.50%.
"Maturity Date" shall mean, unless the Aggregate Maximum
Credit Amounts are sooner terminated under Section 2.03(b) or the
Indebtedness is sooner accelerated under Section 10.02 hereof, April
22, 2003.
"Triggering Event" shall mean the occurrence of one or more of
the following: (a) a Default or an Event of Default, or (b) in the
event that the ratio of (1) the Dollar valuation of that component of
the Borrowing Base determination made under clause (b) of the
definition thereof to (2) the Revolving Facility Usage is equal to or
greater than 1.50 to 1:00, the sum of Excess Availability plus the
undrawn amount of uncancelled Letters of Credit supporting obligations
of any Obligor under Risk Management Agreements is less than
$5,000,000, or (c) in the event that the ratio of (1) the Dollar
valuation of that component of the Borrowing Base determination made
under clause (b) of the definition thereof to (2) the Revolving
Facility Usage is less than 1.50 to 1:00, Excess Availability is less
than $5,000,000, or (d) a Material Adverse Effect.
b. The definition of "Consolidated Net Income" contained in
Section 1.02 of the Agreement is amended by amending and restating clause (iv)
thereof, in its entirety, to read as follows:
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(iv) any extraordinary gains, including gains attributable to
Property sales not in the ordinary course of business and any
gains or losses attributable to the termination or liquidation
of, or resulting from the application of Statement No. 133 of
the Financial Accounting Standards Board to, Risk Management
Agreements;
c. Section 8.01(k) of the Agreement is hereby amended and
restated, in its entirety, to read as follows:
(k) Intentionally Omitted.
d. Section 8.01(m) of the Agreement is hereby amended by
replacing the phrase "June 30th Reserve Report" contained therein with the
phrase "December 31 Reserve Report".
e. Section 8.11 of the Agreement is amended by deleting the
text "fifty percent (50%)" appearing twice in such Section and inserting the
text "forty percent (40%)" in lieu thereof.
f. Section 9.07 of the Agreement is amended by (i) deleting
the text "$500,000" appearing in said Section and inserting the text
"$1,000,000" in lieu thereof; and (ii) deleting the text "$4,000,000" appearing
in said Section and inserting the text "$8,000,000" in lieu thereof.
g. Section 9.12(a) of the Agreement is amended by adding the
text "and with respect to both clauses (i) and (ii), without giving effect to
the impact, if any, of Statement No. 133 of the Financial Accounting Standards
Board" immediately after the text "(excluding current maturities of the
Indebtedness)" appearing in said Section.
h. Section 9.14 of the Agreement is amended by deleting the
text "$1,000,000" appearing in said Section and inserting the text "$2,000,000"
in lieu thereof.
i. Section 9.22 of the Agreement is amended and restated in
its entirety to read as follows:
Section 9.22. Limitations on Capital Expenditures. DEVX and
the Borrower shall not, and shall not permit any Subsidiaries to, make
or pay any capital expenditures (other than maintenance and emergency
capital expenditures and capital expenditures constituting Permitted
Acquisitions) if, after giving effect thereto, (i) the aggregate of all
such capital expenditures made or paid during the twelve month period
ending as of each of the dates set forth below, exceeds the relevant
amount set forth in the following table:
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Period Ending Amount
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January 31, 2001 $18,000,000
February 28, 2001 $19,000,000
March 31, 2001 $20,000,000
April 30, 2001 $23,000,000
May 31, 2001 $24,000,000
June 30, 2001 $25,000,000
July 31, 2001 $28,000,000
August 31, 2001 $28,000,000
September 30, 2001 $29,000,000
October 31, 2001 and the last day of each $30,000,000
successive month thereafter
(ii) the aggregate of all such capital expenditures made or paid during
the period from January 1, 2001 through and including April 22, 2003,
to exceed, in the aggregate, $70,000,000; or (iii) the aggregate of all
such capital expenditures made or paid during any calendar quarter, to
exceed 133% of the amount for capital expenditures for the applicable
quarter as set forth in the current budget delivered to each Agent
pursuant to Section 8.01(m).
2. CONSENT AND WAIVER.
The Lenders hereby consent to the sale by Borrower of those
properties commonly known as (1) the ▇▇▇▇▇▇ Field, ▇▇▇▇▇▇ County, Mississippi,
(2) the West Cap Field, ▇▇▇▇▇▇ County, New Mexico, (3) the ▇▇▇▇▇ Field, St. ▇▇▇▇
▇▇▇▇▇▇, Louisiana, and (4) the ▇▇▇▇▇ in ▇▇▇▇▇▇ County, Texas, all as more
particularly described on Exhibit B hereto (collectively, the "Properties"), and
hereby waive any Event of Default that may be occasioned solely as a result of
such sale. In addition, the Lenders hereby release their Liens in the
Properties, and shall promptly execute and deliver such other documents,
instruments and other agreements as may be reasonably requested by Borrower to
fully effect the release of such Liens.
3. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AMENDMENT.
The effectiveness of this Amendment is subject to the
fulfillment, to the satisfaction of Agents and their counsel, of each of the
following conditions:
a. Collateral Agent shall have received each of the following
documents, in form and substance satisfactory to Collateral Agent and its
counsel, duly executed, and each such document shall be in full force and
effect:
(i) this Amendment; and
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(ii) the Reaffirmation and Consent (as hereinafter defined).
b. Administrative Agent shall have received, for the ratable benefit of
the Lenders, an amendment, consent, and waiver fee of $125,000, which fee is
earned in full by the Lenders, due and payable by Borrower to the Lenders on the
date hereof, and non-refundable when paid;
c. The representations and warranties in Section 4 of this Amendment,
the Agreement as amended by Section 1 of this Amendment, and the other Loan
Documents shall be true and correct in all material respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
d. After giving effect hereto, no Event of Default or event which with
the giving of notice or passage of time would constitute an Event of Default
shall have occurred and be continuing on the date hereof, nor shall result from
the amendments herein;
e. No material adverse change shall have occurred in the financial
condition of DEVX, Borrower, any Subsidiary Guarantor, or in the value of the
Collateral; and
f. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Collateral Agent and its counsel.
4. REPRESENTATIONS AND WARRANTIES. Each of DEVX and the
Borrower hereby represents and warrants to the Agents and the Lenders that: (a)
the execution, delivery, and performance of this Amendment and of the Agreement,
as amended by this Amendment, are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected; and (b) this
Amendment and the Agreement, as amended by this Amendment, constitute the legal,
valid, and binding obligation of each of DEVX and the Borrower, enforceable
against each of DEVX and the Borrower in accordance with their respective terms.
5. REAFFIRMATION AND CONSENT. Concurrently herewith, DEVX and
the Borrower shall cause each current Subsidiary Guarantor to execute and
deliver to the Agents the Reaffirmation and Consent attached hereto as Exhibit A
(the "Reaffirmation and Consent").
6. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. Section 12.13
of the Agreement is incorporated herein by this reference as though fully set
forth herein.
7. MISCELLANEOUS.
a. Upon the effectiveness of this Amendment, each reference in the
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Agreement shall mean and refer to the Agreement as
amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in the Loan
Documents to the "Agreement", "thereunder", "therein", "thereof" or words of
like import referring to the Agreement shall mean and refer to the Agreement as
amended by this Amendment.
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c. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Amendment by signing any such counterpart.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver a manually executed counterpart of this
Amendment but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date first written above.
DEVX: DEVX ENERGY, INC., formerly known as
Queen Sand Resources, Inc., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
BORROWER: DEVX ENERGY, INC., formerly known as
Queen Sand Resources, Inc., a Nevada
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address for Notices for DEVX and the
Borrower:
DevX Energy, Inc., formerly known as
Queen Sand Resources, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
DevX Energy, Inc., formerly known as
Queen Sand Resources, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ 5L4
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
And
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. Boeing
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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COLLATERAL AGENT: ABLECO FINANCE LLC, as Collateral
Agent
By: /s/ ▇▇▇▇▇ ▇. Genda
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▇▇▇▇▇ ▇. Genda
Senior Vice President and
Chief Credit Officer
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Genda
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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ADMINISTRATIVE AGENT: FOOTHILL CAPITAL CORPORATION
By: /s/ Authorized Signatory
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Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Business Finance Division Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDER: ABLECO FINANCE LLC
By: /s/ ▇▇▇▇▇ ▇. Genda
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▇▇▇▇▇ ▇. Genda
Senior Vice President and
Chief Credit Officer
LENDER: FOOTHILL CAPITAL CORPORATION
By: /s/ Authorized Signatory
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EXHIBIT A
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment Number Five
to Amended and Restated Credit Agreement and Consent and Waiver, dated as of
January 31, 2001 (the "Amendment"). Each of the undersigned hereby (a)
represents and warrants to the Agents and the Lenders that the execution,
delivery, and performance of this Reaffirmation and Consent are within its
corporate powers, have been duly authorized by all necessary corporate action,
and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected; (b) consents to the amendment of the Agreement by the
Amendment; (c) acknowledges and reaffirms its obligations owing to the Agents
and the Lenders under its respective Second Amended and Restated Guaranty
Agreement dated as of October 22, 1999 (each a "Guaranty", and collectively, the
"Guaranties") and any other Loan Documents to which it is party; and (d) agrees
that the Guaranty and any other Loan Documents to which it is a party is and
shall remain in full force and effect. Although each of the undersigned has been
informed of the matters set forth herein and has acknowledged and agreed to
same, it understands that the Agents and the Lenders have no obligation to
inform it of such matters in the future or to seek its acknowledgement or
agreement to future amendments, and nothing herein shall create such a duty.
This Reaffirmation and Consent may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Reaffirmation and Consent.
Delivery of an executed counterpart of this Reaffirmation and Consent by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Reaffirmation and Consent. Any party delivering an executed
counterpart of this Reaffirmation and Consent by telefacsimile also shall
deliver an original executed counterpart of this Reaffirmation and Consent but
the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Reaffirmation and Consent.
This Reaffirmation and Consent shall be governed by internal laws of the State
of New York as more fully set forth in Section 5.04 of the Guaranties.
DEVX ENERGY, INC., formerly known as
Queen Sand Resources, Inc., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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DEVX OPERATING COMPANY, formerly
known as Queen Sand Operating Co., a
Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
CORRIDA RESOURCES, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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