EXHIBIT 10.27
THIRD AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
between
TGX CORPORATION
and
BANK ONE, TEXAS, NATIONAL ASSOCIATION
Effective as of
October 1, 1996
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS........................................ 1
1.01 Terms Defined Above.......................... 1
1.02 Terms Defined in Agreement................... 1
1.03 References................................... 1
1.04 Articles and Sections........................ 2
1.05 Number and Gender............................ 2
ARTICLE II. AMENDMENTS......................................... 2
2.01 Amendment of Section 1.2..................... 2
2.02 Amendment of Section 2.7 (a)................. 3
2.03 Amendment of Section 2.12.................... 3
2.04 Amendment of Section 6.17.................... 3
2.05 Amendment of Section 6.18.................... 3
ARTICLE III. CONDITIONS......................................... 4
3.01 Receipt of Documents......................... 4
3.02 Accuracy of Representations and Warranties.. 4
3.03 Matters Satisfactory to Lender............... 4
ARTICLE IV. REPRESENTATIONS AND WARRANTIES..................... 5
ARTICLE V. RATIFICATION....................................... 5
ARTICLE VI. MISCELLANEOUS...................................... 5
6.01 Scope of Amendment........................... 5
6.02 Agreement as Amended......................... 5
6.03 Parties in Interest.......................... 5
6.04 Rights of Third Parties...................... 5
6.05 ENTIRE AGREEMENT............................. 5
6.06 GOVERNING LAW................................ 6
6.07 JURISDICTION AND VENUE....................... 6
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THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Third Amendment") is made and entered into effective as of October 1, 1996, by
and between TGX CORPORATION, a Delaware corporation ("Borrower") and BANK ONE,
TEXAS, NATIONAL ASSOCIATION, a national banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, the above named parties did execute and exchange counterparts
of that certain Amended and Restated Credit Agreement dated July 13, 1994, as
amended by First Amendment effective as of June 1, 1995, and Second Amendment
effective as of October 1, 1995 (the "Agreement"), to which reference is here
made for all purposes;
WHEREAS, the parties subject to and bound by the Agreement are
desirous of amending the Agreement in the particulars hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties to the Agreement, as set forth therein, and the mutual
covenants and agreements of the parties hereto, as set forth in the Third
Amendment, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms
"Agreement," "Borrower," "Third Amendment," and "Lender" shall have the meaning
assigned to such term hereinabove.
1.02 Terms Defined in Agreement. As used herein, each term defined
in the Agreement shall have the meaning assigned thereto in the Agreement,
unless expressly provided herein to the contrary.
1.03 References. References in this Third Amendment to Article or
Section numbers shall be to Articles and Sections of this Third Amendment,
unless expressly stated herein to the contrary. References in this Third
Amendment to "hereby," "herein," "hereinafter," "hereinabove," "hereinbelow,"
"hereof," and "hereunder" shall be to this Third Amendment in its entirety and
not only to the particular Article or Section in which such reference appears.
1.04 Articles and Sections. This Third Amendment, for convenience
only, has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Third Amendment as an entirety and without
regard to such division into Articles and Sections and without regard to
headings prefixed to such Articles and Sections.
1.05 Number and Gender. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural and
likewise the plural shall be understood to include the singular. Words denoting
sex shall be construed to include the masculine, feminine, and neuter, when such
construction is appropriate, and specific enumeration shall not exclude the
general, but shall be construed as cumulative. Definitions of terms defined in
the singular and plural shall be equally applicable to the plural or singular,
as the case may be.
ARTICLE II.
AMENDMENTS
The Borrower and the Lender hereby amend the Agreement in the
following particulars:
2.01 Amendment of Section 1.2. Section 1.2 of the Agreement is
hereby amended as follows:
The following definitions are amended to read as follows:
"Commitment Amount" shall, subject to the applicable provisions of
this Agreement and in particular, Section 2.7, mean the amount of
$5,000,000.
"Commitment Termination Date" shall mean June 30, 1999.
"Final Maturity" shall mean June 30, 1999.
"Floating Rate" shall mean an interest rate per annum equal to the
Base Rate from time to time in effect plus one and one-half percent (1
1/2%), but in no event exceeding the Highest Lawful Rate.
"Letter of Credit" shall mean any standby letter of credit issued by
the Lender for the account of the Borrower pursuant to Section 2.19.
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2.02 Amendment of Section 2.7(a). Section 2.7(a) is amended to read
as follows:
"(a) The Borrowing Base as of September 1, 1996, is acknowledged by
the Borrower and the Lender to be $5,000,000. The Monthly Reduction
Amount as of September 1, 1996, is acknowledged by the Borrower and
the Lender to be $100,000. Commencing on October 1, 1996, and
continuing thereafter on the first day of each calendar month through
the Commitment Termination Date, the amount of the Borrowing Base
shall be reduced by the Monthly Reduction Amount."
2.03 Amendment of Section 2.12. Section 2.12 of the Agreement is
hereby amended to read as follows:
"Engineering Fee. In addition to interest on the Note as provided
herein and the Commitment Fees, Facility Fees and Letter of Credit
Fees payable hereunder and to compensate the Lender for the costs of
evaluating the Collateral and reviewing the Reserve Reports, the
Borrower shall pay to the Lender, in immediately available funds, on
the date of each redetermination of the Borrowing Base, an engineering
fee in the amount of $5,000.00."
2.04 Amendment of Section 6.17. Section 6.17 of the Agreement is
hereby amended to read as follows:
"6.17 Capital Expenditures. Make expenditures for capital or fixed
assets in any fiscal year other than for domestic oil and gas
properties and related assets required in the ordinary course of
business and not to exceed the aggregate amount of $50,000.00."
2.05 Amendment of Section 6.18. Section 6.18 of the Agreement is
hereby amended to read as follows:
"6.18 Borrower shall not permit general and administrative expenses to
be more than the following:
(a) For the quarter ending March 31, 1997, the amount of general and
administrative expenses for such period, times 4 equals a sum that, if
in excess of $1,700,000, in Lender's sole discretion, be deemed to be
in compliance or not.
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(b) For the six month period ending June 30, 1997, the amount of general
and administrative expenses times 2 equals a sum that, if in excess of
$1,700,000 in Lender's sole discretion, be deemed to be in compliance or
not.
(c) For the nine month period ending September 30, 1997, the amount of
general and administrative expenses times 1.33 equals a sum that, if in
excess of $1,700,000, in Lender's sole discretion, be deemed to be in
compliance or not.
(d) For the year ending December 31, 1997, for each rolling four
quarters thereafter, the amount of general and administrative expenses
shall not exceed $1,700,000."
ARTICLE III.
CONDITIONS
The obligation of the Lender to amend the Agreement as provided herein
is subject to the fulfillment of the following conditions precedent:
3.01 Receipt of Documents. The Lender shall have received, reviewed, and
approved the following documents and other items, appropriately executed when
necessary and in form and substance satisfactory to the Lender:
(a) multiple counterparts of this Third Amendment and the Note, as
requested by the Lender;
(b) Notice of Final Agreement; and
(c) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
3.02 Accuracy of Representations and Warranties. The representations
and warranties contained in Article IV of the Agreement and this Third Amendment
shall be true and correct.
3.03 Matters Satisfactory to Lender. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lender.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lender, all of
the representations and warranties set forth in Article IV of the Agreement, and
represents and warrants that all such representations and warranties remain
true and unbreached.
ARTICLE V.
RATIFICATION
Each of the parties hereto does hereby adopt, ratify, and confirm the
Agreement and the other Loan Documents, in all things in accordance with the
terms and provisions thereof, as amended by this Third Amendment.
ARTICLE VI.
MISCELLANEOUS
6.01 Scope of Amendment. The scope of this Third Amendment is
expressly limited to the matters addressed herein and this Third Amendment shall
not operate as a waiver of any past, present, or future breach, Default, or
Event of Default under the Agreement, except to the extent, if any, that any
such breach, Default, or Event of Default is remedied by the effect of this
Third Amendment.
6.02 Agreement as Amended. All references to the Agreement in any
document heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this Third Amendment.
6.03 Parties in Interest. All provisions of this Third Amendment shall
be binding upon and shall inure to the benefit of the Borrower, the Lender and
their respective successors and assigns.
6.04 Rights of Third Parties. All provisions herein are imposed solely
and exclusively for the benefit of the Lender and the Borrower, and no other
Person shall have standing to require satisfaction of such provisions in
accordance with their terms and any or all of such provisions may be freely
waived in whole or in part by the Lender at any time if in its sole discretion
it deems it advisable to do so.
6.05 ENTIRE AGREEMENT. THIS THIRD AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
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SUBJECT HEREOF AND SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL,
BETWEEN SUCH PARTIES REGARDING THE SUBJECT HEREOF. FUTHERMORE IN THIS REGARD,
THIS THIRD AMENDMENT, THE AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, AND THE
OTHER WRITTEN DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN
CONNECTION WITH OR AS SECURITY FOR THE NOTE REPRESENT, COLLECTIVELY, THE FINAL
AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
6.06 GOVERNING LAW. THIS THIRD AMENDMENT, THE AGREEMENT AND THE NOTE
SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. THE PARTIES ACKNOWLEDGE
AND AGREE THAT THIS AGREEMENT AND THE NOTE AND THE TRANSACTIONS CONTEMPLATED
HEREBY BEAR A NORMAL, REASONABLE, AND SUBSTANTIAL RELATIONSHIP TO THE STATE OF
TEXAS.
6.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS THIRD AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED
IN COURTS HAVING SITUS IN ▇▇▇▇▇▇ COUNTY, TEXAS. EACH OF THE BORROWER AND THE
LENDER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE BORROWER OR THE LENDER IN ACCORDANCE WITH THIS SECTION.
IN WITNESS WHEREOF, this Third Amendment to Amended and Restated Credit
Agreement is executed effective the date first hereinabove written.
BORROWER:
TGX CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
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LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Vice-President
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