FIRST AMENDMENT TO
LOAN AGREEMENT
Dated effective as of
May 1, 1999
between and among
UNIT CORPORATION
UNIT DRILLING AND EXPLORATION COMPANY
MOUNTAIN FRONT PIPELINE COMPANY, INC.
UNIT DRILLING COMPANY
UNIT PETROLEUM COMPANY
PETROLEUM SUPPLY COMPANY
and
UNIT ENERGY CANADA, INC.
"Borrowers"
and
BANK OF OKLAHOMA, NATIONAL ASSOCIATION
BANKBOSTON, N.A.
BANK OF AMERICA, N.A.
LOCAL OKLAHOMA BANK, N. A.
"Banks"
and
BANK OF OKLAHOMA, NATIONAL ASSOCIATION
"Agent"
FIRST AMENDMENT TO LOAN AGREEMENT
---------------------------------
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated effective as of May 1, 1999
("First Amendment"), is entered into among UNIT CORPORATION, a Delaware
corporation ("Unit"), UNIT DRILLING AND EXPLORATION COMPANY, a Delaware
corporation, MOUNTAIN FR ONT PIPELINE COMPANY, INC., an Oklahoma corporation,
UNIT DRILLING COMPANY, an Oklahoma corporation, UNIT PETROLEUM COMPANY, an
Oklahoma corporation, PETROLEUM SUPPLY COMPANY, an Oklahoma corporation, and
UNIT ENERGY CANADA INC., an Alberta, Canada c orporation, each with its
principal place of business at 1000 Galleria Tower 1, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (collectively the "Borrowers") and BANK OF OKLAHOMA, NATIONAL
ASSOCIATION, with principal offices at Bank of Oklahoma Tower, ▇ ▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BOK"); BANKBOSTON, N. A., with principal offices
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BankBoston); BANK OF
AMERICA, N.A., formerly known as NationsBank, N. A., with banking offices at ▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ("B of A"); and LOCAL OKLAHOMA BANK, N.
A., formerly known as Local Federal Bank, FSB, with principal offices at ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Local Oklahoma") (BOK,
BankBoston, B of A and Lo cal Oklahoma each being sometimes referred to herein,
individually, as a "Bank", and collectively as the "Banks"); and BOK as Agent
for the Banks (in such capacity, herein referred to as the "Agent").
WITNESSETH:
WHEREAS, the Borrowers, BOK, Bank Boston, B of A, Local Oklahoma and the
Agent are parties to that certain Loan Agreement dated as of April 30, 1998
(referred to herein as the "Loan Agreement"), pursuant to which BOK, BankBoston,
B of A and L ocal Oklahoma extended to the Borrowers several but not joint
revolving lines of credit in the aggregate principal amount of $100,000,000
(collectively the "Line Commitment"), all of which converts to a forty-eight
(48) month term payment (the "Ter m Commitment") on the Conversion Date therein
specified; and
WHEREAS, the Banks have agreed to continue the existing Loan Value in the
principal amount of $85,000,000 through and including September 30, 1999, in
accordance with the terms, provisions and conditions of the Loan Agreement and
the parties hereto have agreed to certain other modifications and amendments
concerning the applicable interest rates available under the Options as well as
the establishment of a Fixed Rate Option available to Borrower prior to the
Conversion Date as herein de scribed.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers and the Banks agree
as follows:
1. Amended Definitions. The foregoing defined term in the Loan Agreement
is hereby amended, as follows:
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"Fixed Rate" shall have the meaning ascribed thereto in Section 2.5(a) of
this Agreement.
"Fixed Rate Funding Segment" shall mean the portion of the outstanding
principal amount of the Notes (neither less than $15,000,000 nor to exceed
$50,000,000 in the aggregate) to which a Fixed Rate Option applies for the Fixed
Rate term (neit her less than 2 years nor in excess of the lesser of (a) five
(5) years or (b) the months remaining until the maturity date of the Notes).
"Fixed Rate Loans" shall mean the aggregate dollar amount of all Fixed Rate
Funding Segment Line Loans advanced pursuant to Section 2.1 of this Agreement.
"Fixed Rate Option" shall mean for each of the Banks the fixed annual
percentage rate determined from time to time pursuant to the provisions of
Section 2.5(a) of this Agreement.
"Hedge Agreements" means interest rate or commodities Swap, cap or collar
agreements, interest rate future or option contracts, currency Swap agreements,
currency future or option contracts and other similar interest risk management
agreeme nts.
"Indebtedness" shall mean and include any and all: (i) indebtedness,
obligations and liabilities of the Borrowers to the Banks and the Agent incurred
or which may be incurred hereafter pursuant to the terms of this Agreement or
any of the oth er Loan Documents, and any extensions, renewals, substitutions,
amendments and increases in amount thereof, including such amounts as may be
evidenced by the Notes and all lawful interest, letters of credit fees, service
fees, commitment fees and oth er charges, and all reasonable costs and expenses
incurred in connection with the preparation, filing and recording of the Loan
Documents, including attorneys fees; (ii) any and all obligations, contingent or
otherwise, whether now existing or hereaf ter arising, of any one or more of the
Borrowers or any affiliates or subsidiaries thereof to the Banks or any one or
more of them arising under or in connection with applicable Hedge Agreements or
Swaps (including without limitation, ISDA Master Ag reement[s]); (iii) all
reasonable costs and expenses, including attorneys' fees, paid or incurred by
the Banks or the Agent in enforcing or attempting to enforce collection of any
Indebtedness and in enforcing or realizing upon or attempting to enfor ce or
realize upon any collateral or security for any Indebtedness and in protecting
and preserving the Banks' interest in the Indebtedness or any collateral or
security for any Indebtedness in any bankruptcy or reorganization proceeding,
including i nterest on all sums so expended by the Banks or the Agent accruing
from the date upon which such expenditures are made until paid, at an annual
rate equal to the Default Rate; (iv) sums expended by the Banks in curing any
Event of Default or Default of the Borrowers under the terms of the Loan
Documents or any other security agreement or other writing evidencing or
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securing the payment of the Notes together with interest on all sums so expended
by the Banks or the Agent accruing from the date up on which such expenditures
are made until paid, at an annual rate equal to the Default Rate; and (v) all
"Indebtedness" or "Secured Indebtedness" as said terms are defined in each of
the Loan Documents.
"Swaps" shall mean, with respect to any Person, payment obligations with
respect to interest rate or commodity swaps, currency swaps and similar
obligations obligating such Person to make payments, whether periodically or
upon the happening o f a contingency. For the purposes of this Agreement, the
amount of the obligations under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement relating
to such Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides f or the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
2. Notes. The form of the Notes referenced in Section 2 of the Loan
Agreement and attached thereto as Exhibits A-1 (BOK), A-2 (BankBoston), A-3 (B
of A) and A-4 (Local Oklahoma), respectively, remain in full force and effect
and are unc hanged except for the availability of the Fixed Rate Option
described in Section 2.5(a) hereof.
3. Section 2.5 (a) of the Loan Agreement is hereby modified and amended
and replaced in its entirety by the following:
"Interest. The Notes shall bear interest and be payable as follows:
(a) Available Options. Except as hereinafter provided, during
the period commencing on the Closing Date and continuing through the
Conversion Date, interest shall accrue on that portion of the
aggregate principal amount of the Notes from time to time outstanding
and on any past due interest prior to an Event of Default
(collectively the "Debt") according to the following interest rate
matrix:
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Percentage that the Debt
Bears to the Loan Value Options
------------------------ -------------------------------------------
Prime Rate Libor Rate
---------- ----------
Less than 50% Applicable Prime Rate Libor Rate plus
or 1.000%
50% - up to but not Applicable Prime Rate Libor Rate plus
including 75% or 1.250%
75% or more Applicable Prime Rate Libor Rate plus
or 1.500%
Except as hereinafter provided, during the period commencing on the
earlier of the Conversion Date or May 1, 2002, and continuing through
Maturity, interest shall accrue on the Debt according to the following
interest rate matrix:
Percentage that the Debt
Bears to the Loan Value Options
------------------------ -------------------------------------------
Prime Rate Libor Rate
---------- ----------
Less than 50% Applicable Prime Rate Libor Rate plus
or 1.250%
50% - up to but not Applicabel Prime Rate Libor Rate plus
including 75% or 1.500%
75% or more Applicable Prime Rate Libor Rate plus
or 1.750%
Notwithstanding the foregoing, and at least three (3) Business Days prior
to the Conversion Date, at Borrowers' request, pursuant to a written notice from
Unit to the Agent requesting a Fixed Rate Loan (the "Fixed Rate Election
Notice"), and specifying the amount and term thereof received thereby at least
three (3) Business Days prior to the first date of application of the Fixed Rate
(the "Fixed Rate Election Notice Date"), the Borrowers may request the selection
of a Fixed Rate for the Notes pursuant to which the Agent, within two (2)
Business Days of receipt of the Fixed Rate Election Notice, shall notify Unit of
the Banks' Fixed Rate, subject to the terms, provisions and limitations
hereinafter set forth. Fixed Rate Loans selec ▇▇▇ by the Borrowers in
accordance herewith shall accrue interest, payable monthly on the first day of
each calendar month, commencing June 1, 1999.
As used in this Agreement, "Fixed Rate" shall mean one and three-quarters
percent (1.750%) per annum above the "Swap Rate." Once selected by Unit and
quoted by the Agent, the Fixed Rate may not be changed by the Borrowers as to
the applicabl e advance to which it applies. The "Swap Rate" means the lowest
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bid rate acceptable to the applicable Bank or Banks from a Swap counterparty
acceptable to the applicable Bank or Banks pursuant to Hedge Agreements, Swaps
or other comparable fixed int erest rate arrangements entered into and
acceptable to the applicable Bank or Banks. The right of the Borrowers to
select a Fixed Rate Loan is also subject to the following: (i) the minimum
principal sum thereof shall be $15,000,000 and the maximum aggregate principal
sum of all outstanding Fixed Rate Loans shall be $50,000,000; (ii) the minimum
term thereof shall be two (2) years and the maximum term thereof shall not
extend beyond the earlier of (x) maturity date hereof (presently May 1, 2005) or
five (5) years from the initial date of such Fixed Rate Loan; (iii) the
amortization period for the quoted Fixed Rate shall be on an interest only basis
for the specified term thereof with all principal due and payable at the
expiration of such quoted term; (iv) interest shall be computed upon the actual
number of days elapsed based upon a 360-day year; and (v) no partial prepayment
may be made, but a prepayment in whole may be made if accompanied by the
applicable Prepayment Fee, if any, o r in exchange for a Prepayment Credit, if
any. The Swap Rate shall be effective as of the Fixed Rate Election Notice Date
or within two (2) Business Days thereafter. Except to the extent otherwise
governed by an ISDA Master Agreement(s) entered int o by certain of the Banks
and the Borrowers, the "Prepayment Fee" means the amount payable by the
Borrowers to the Agent for the benefit of the Banks equal to the amount which
the Banks are obligated to pay to the Swap counterparty upon the Banks' t
ermination of the Hedge Agreement or comparable Swap or other interest risk
management agreement at the time of the Fixed Rate prepayment by the Borrowers
(i.e., the "market value" of the interest rate hedge or swap is negative).
Except to the exten t otherwise governed by an ISDA Master Agreement(s) entered
into by certain of the Banks and the Borrowers, the "Prepayment Credit" means
the amount payable by the Banks to the Borrowers equal to the amount received by
the Agent on behalf of the Bank s from their Swap counterparty upon the Banks'
termination of the Hedge Agreement or comparable Swap or other interest risk
management agreement at the time of the Fixed Rate prepayment by the Borrowers
(i.e., the "market value" of the interest rate hedge or swap is positive).
In determining the percentage that the Debt bears to the Loan Value, the
"Debt" and the "Loan Value" shall be the average of such respective amounts
during the most recent calendar month preceding such determination. The
Applicable Prime Rat e option described above in the matrices is hereinafter
referred to as the "Prime Rate Option", the Libor Rate interest option described
above in the matrices is hereinafter referred to as the "Libor Rate Option" and
the Fixed Rate interest option de scribed above is hereinafter referred to as
the "Fixed Rate Option". The Prime Rate Option shall be computed on the basis
of a year of 365 or 366 days, as the case may be and the Libor Rate Option and
the Fixed Rate Option shall be based on a year o f 360 days and actual days
elapsed. Within thirty (30) days of the signing date of this First Amendment
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(as opposed to the effective date of May 1, 1999), the Borrowers shall enter
into a Swap, Hedge Agreement or comparable ISDA Master Agreement wit h such one
or more of the Banks electing to require the same for such percentage of such
Fixed Rate Option Loans as may be required by such Bank(s)."
4. Loan Value Fixed Rate Margin Reduction. The available Borrowing Base
(as redetermined pursuant to adjustments in the Loan Value from time to time
pursuant to Article III of the Loan Agreement) calculated on each semi-annual
Redetermi nation Date shall be reduced by the Fixed Rate Margin Reduction as
determined by the Majority Banks effective as of each semi-annual
Redetermination Date. "Fixed Rate Margin Reduction" shall mean the dollar
amount of the risk of an interest rate inc ▇▇▇▇▇ on the outstanding Fixed Rate
Loan advances during the next succeeding six (6) months as reasonably projected
and estimated by the Majority Banks. The Agent shall notify the Borrower of the
Fixed Rate Margin Reduction concurrent with the notif ication thereby of the
redetermined Loan Value.
5. Contingent Liabilities. Section 6.18(D) of the Loan Agreement is
amended to read in its entirety as follows:
"(D) Unit's limited payment guarantee to BOK (not to exceed the
principal amount of $2,000,000) of the line of credit of Superior Pipeline
Company, L.L.C. established with BOK in an amount not in excess of
$4,000,000;".
6. Ratifications, Representations and Warranties. The terms and
provisions set forth in this First Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Loan Agreement and except as
expressly modifi ed and superseded by this First Amendment, the terms and
provisions of the Loan Agreement are ratified and confirmed and shall continue
in full force and effect. The Borrowers and the Banks agree that the Loan
Agreement, as amended hereby, shall con tinue to be legal, valid, binding and
enforceable in accordance with its terms.
7. Reference to Agreement. Each of the Loan Documents, including the
Loan Agreement and any and all other agreements, documents, or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the term s of the Loan Agreement as amended hereby, are hereby amended so that
any reference in such Loan Documents to the Loan Agreement shall mean a
reference to the Loan Agreement as amended hereby.
8. Costs. The Borrowers agree to pay to the Agent for the benefit of the
Banks on demand all recording fees and filing costs and all reasonable attorneys
fees and legal expenses incurred or accrued by the Banks in connection with the
pr eparation, negotiation, closing, administration of the Loan Documents
(including this First Amendment) and the filing and recording of the Security
Instruments or any amendment, waiver, consent or modification to and of the Loan
Documents. In any ac tion to enforce or construe the provisions of the Loan
Agreement or any of the Loan Documents, the prevailing party shall be entitled
to recover its reasonable attorneys' fees and all costs and expenses related
thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered to the Agent in Tulsa, Oklahoma, effective as of
the day and year first above written in multiple counterparts, each of which
shall be d eemed an original and all of which shall be deemed but one and the
same instrument. Delivery of an executed counterpart of a signature page to
this First Amendment by telecopier or facsimile shall be as effective as
delivery of a manually executed c ounterpart hereof.
"Borrowers"
UNIT CORPORATION, a Delaware corporation, UNIT DRILLING AND EXPLORATION
COMPANY, a Delaware corporation, MOUNTAIN FRONT PIPELINE COMPANY, INC.,an
Oklahoma corporation, UNIT PETROLEUM COMPANY, an Oklahoma corporation,
UNIT DRILLING COMPANY, an Oklahoma corporation, PETROLEUM SUPPLY COMPANY, an
Oklahoma corporation
By__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Treasurer of UNIT CORPORATION, UNIT DRILLING AND EXPLORATION
COMPANY, MOUNTAIN FRONT PIPELINE COMPANY, INC., UNIT PETROLEUM COMPANY, UNIT
DRILLING COMPANY, PETROLEUM SUPPLY COMPANY
"Banks"
BANK OF OKLAHOMA, NATIONAL
ASSOCIATION
By_______________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
"Agent"
BANK OF OKLAHOMA, NATIONAL
ASSOCIATION
By_______________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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BANKBOSTON, N.A.
By_______________________________
Its:________________________
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & Utility Division 01-08-02
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BANK OF AMERICA, N.A.
By_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇,
Senior Vice President
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
LOCAL OKLAHOMA BANK, N. A.
By_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Executive Vice President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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