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EXHIBIT 10(b)
FIRST AMENDMENT TO FIRST RESTATED CREDIT AGREEMENT
This First Amendment to First Restated Credit Agreement (this "First
Amendment") is entered into as of the 2th day of January, 1998, by and among
Denbury Management, Inc. ("Borrower"), Denbury Resources Inc. ("Parent"),
NationsBank of Texas, N.A., as Administrative Agent ("Administrative Agent"),
and NationsBank of Texas, N.A. as Bank ("Bank").
W I T N E S S E T H:
WHEREAS, Borrower, Parent, Administrative Agent and Bank are parties
to that certain First Restated Credit Agreement dated as of December 29, 1997
(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 certain Loans
to Borrower; and
WHEREAS, Borrower, Parent, Administrative Agent and Bank desire to
amend the Credit Agreement in certain respects.
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, Parent, Administrative Agent and Bank hereby agree as follows:
Section 1. Amendments. In reliance on the representations,
warranties, covenants and agreements contained in this First Amendment, the
Credit Agreement is hereby amended effective the date set forth in the preamble
hereto in the manner provided in this Section 1.
1.1. Additional Definitions. Section 1.1 of the Credit Agreement
is hereby amended to add the definitions "First Amendment" and "Initial
Conforming Borrowing Base" as follows:
"First Amendment" means that certain First Amendment to First
Restated Credit Agreement dated as of January 27, 1998 among Borrower,
Parent, Administrative Agent and Banks.
"Initial Conforming Borrowing Base" means the Conforming
Borrowing Base in effect from the Closing Date until the first
Redetermination after the Closing Date. The Initial Conforming
Borrowing Base shall be $175,000,000; provided, that, if the aggregate
amount of the Permitted Subordinate Debt when issued equals or exceeds
$100,000,000, the Initial Conforming Borrowing Base shall reduce
simultaneously with such issue by an amount equal to forty percent
(40%) of the excess of the amount of the Permitted Subordinate Debt as
issued over $100,000,000.
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1.2. Amendments to Definitions. The definitions of "Loan Papers"
and "Permitted Subordinate Debt" in Section 1.1 of the Credit Agreement are
hereby amended to read in full as follows:
"Loan Papers" means this Agreement, the First Amendment, the
Notes, the Facility Guaranty, the Parent Pledge Agreement, the
Existing Mortgages (as amended by the Amendment to Mortgages), all
Mortgages now or at any time hereafter delivered pursuant to Section
5.1, and all other certificates, documents or instruments delivered in
connection with this Agreement, as the foregoing may be amended from
time to time.
"Permitted Subordinate Debt" means Debt of Borrower resulting
from a single issue of senior subordinate notes and in an aggregate
outstanding principal balance of not greater than $150,000,000, and
which (a) is unsecured, (b) has a stated maturity of at least ten
years from the date of issue and does not provide for the
establishment of any sinking fund or otherwise require any mandatory
redemption, repayment, defeasance, repurchase or other amortization
prior to the scheduled maturity, (c) does not provide for a
non-default rate of interest greater than ten percent (10%) per annum
or original issue discount greater than three percent (3%), in each
case unless approved by Required Banks, (d) is fully subordinated to
the Obligations pursuant to subordination provisions which have been
approved by Required Banks, such approval to not be unreasonably
withheld, and (e) is not subject to negative covenants or events of
default (or other provisions which have the same effect as negative
covenants or events of default) which have not been approved by
Required Banks.
1.3. Amendment to Borrowing Base Provisions. Sections 4.4(a) and
4.6 of the Credit Agreement are hereby amended to read in full as follows:
(a) The Borrowing Base and the Conforming Borrowing Base shall
be redetermined on July 1, 1998 and on each October 1 and April 1
thereafter commencing October 1, 1998 or, in each such case, on a date
as promptly thereafter as reasonably possible based on engineering and
other information available to the Banks; provided, that, the Banks'
right to redetermine the Borrowing Base on or around July 1, 1998
under this clause (a) will be automatically waived if, subsequent to
the Closing Date and on or before such date, Parent issues newly
issued shares of common stock which results in Net Cash Proceeds to
Parent of at least $78,100,000.
SECTION 4.6 Initial Borrowing Base. The Borrowing Base
shall be $260,000,000 and the Conforming Borrowing Base shall be the
Initial Conforming Borrowing Base, in each case for the period
commencing on the date hereof and ending on the first Redetermination
after the Closing Date. The Borrowing Base in effect under this
Section 4.6 shall reduce (but not below the Conforming Borrowing
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Base) immediately upon the consummation of any Securities Offering by
any Credit Party in an amount equal to the Net Cash Proceeds resulting
from such Securities Offering. Simultaneously with any such
reduction, Borrower shall make a mandatory prepayment of the Revolving
Loan in an amount sufficient to eliminate any Borrowing Base
Deficiency resulting from such reduction in the Borrowing Base.
1.4. Amendment to Debt Covenant. Section 9.1 of the Credit
Agreement is hereby amended to read in full as follows:
SECTION 9.1 Incurrence of Debt. The Credit Parties will
not, nor will the Credit Parties permit any of their Subsidiaries to,
incur, become or remain liable for any Debt; provided that (a) the
Credit Parties may incur, become and remain liable for (i) the
Obligations, and (ii) other unsecured Debt in an aggregate amount
outstanding at any time not to exceed $10,000,000, (b) Borrower may
incur, become and remain liable for Permitted Subordinate Debt, and
(c) Parent and any Subsidiary of Borrower may incur, become and remain
liable for Permitted Subordinate Debt as a guarantor; provided, that
(i) such Guarantees of Permitted Subordinate Debt shall be
subordinated to the Obligations pursuant to subordination provisions
approved by Required Banks, such approval to not be unreasonably
withheld, and (ii) prior to the execution and delivery by any
Subsidiary of Borrower of any Guaranty of Permitted Subordinate Debt,
such Subsidiary shall (A) execute and deliver to Administrative Agent
for the ratable benefit of the Banks (A) an unconditional, joint and
several Guaranty of the Obligations in form and substance acceptable
to Administrative Agent, and (B) such certificates of officers of
such Subsidiary, certificates of Governmental Authorities, resolutions
of the Board of Directors (or comparable body) of such Subsidiary,
opinions of counsel and such other documents, instruments and
agreements as Administrative Agent shall reasonably require to
evidence the existence of such Subsidiary, the proper authorization,
execution and delivery of such Guaranty by such Subsidiary, the
enforceability of such Guaranty against such Subsidiary and such other
matters related thereto as Administrative Agent shall reasonably
require.
Section 2. Restatement of Articles of Incorporation. Borrower
has advised Administrative Agent and Bank that Borrower intends to amend and
restate its Articles of Incorporation in the form of Exhibit A hereto. Agent
and Bank hereby consent to such amendment and restatement and waive compliance
by Borrower with Section 9.6 of the Credit Agreement to the extent it prohibits
such amendment and restatement.
Section 3. Representations and Warranties of Borrower. To
induce Bank and Administrative Agent to enter into this First Amendment,
Borrower and Parent hereby represent and warrant to Administrative Agent and
Bank as follows:
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(a) Each representation and warranty of Borrower and Parent
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.
(b) The execution, delivery and performance by Borrower and Parent
of this First Amendment are within the Borrower's and Parent's corporate
powers, have been duly authorized by 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 any Credit Party or any Subsidiary of any
Credit Party or result in the creation or imposition of any Lien upon any of
the assets of any Credit Party or any Subsidiary of any Credit Party except
Permitted Encumbrances.
(c) The First Amendment constitutes the valid and binding
obligations of Borrower and Parent 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.
(d) Borrower and Parent have no defenses to payment, counterclaim
or rights of set-off with respect to the Obligations existing on the date
hereof.
Section 4. Miscellaneous.
4.1. Reaffirmation of Loan Papers; Extension of Liens. 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.
Borrower and Parent hereby extend the Liens securing the Obligations until the
Obligations have been paid in full and agree that the amendments and
modifications herein contained shall in no manner affect or impair the
Obligations or the Liens securing payment and performance thereof.
4.2. Parties in Interest. All of the terms and provisions of this
First Amendment shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
4.3. 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.
4.4. Counterparts. This First Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however,
no party shall be bound by this First Amendment until the parties have executed
a counterpart. Facsimiles shall be effective as originals.
4.5. Complete Agreement. THIS FIRST 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,
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CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
4.6. Headings. The headings, captions and arrangements used in
this First Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this First
Amendment, nor affect the meaning thereof.
(signature pages to follow)
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IN WITNESS WHEREOF, the parties hereby have caused this First
Amendment to be duly executed by their respective authorized officers on the
date and year first above written.
BORROWER:
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DENBURY MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Chief Financial Officer
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PARENT:
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DENBURY RESOURCES, INC.,
a corporation incorporated under the
Canada Business Corporations Act
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Chief Financial Officer
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ADMINISTRATIVE AGENT:
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NATIONSBANK OF TEXAS, N.A.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
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J. ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
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BANK:
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NATIONSBANK OF TEXAS, N.A.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
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J. ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
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