FOURTH AMENDMENT, WAIVER AND AGREEMENT
Exhibit 10.9
This Fourth Amendment, Waiver and Agreement (“Agreement”) dated as of April 9, 2009
(“Effective Date”) is by and among ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, an Ohio corporation (the
“Company”), the Lenders (as defined below), and BNP Paribas, as Administrative Agent (as
such term is defined below).
RECITALS
A. The Company, certain subsidiaries of the Company, as Guarantors, the lenders party thereto
from time to time (the “Lenders”), and BNP Paribas, as administrative agent for such
Lenders (together with its permitted successors in such capacity, the “Administrative
Agent”) are parties to the First Amended and Restated Credit and Guaranty Agreement dated as of
August 16, 2005, as amended by the First Amendment to Credit Agreement dated as of September 27,
2005, the Second Amendment and Waiver dated as of August 3, 2007 and the Third Amendment and Waiver
dated as of March 24, 2008 (as so amended and as the same may be amended or modified from time to
time, the “Credit Agreement”).
B. The Company, the Lenders and the Administrative Agent wish to, subject to the terms and
conditions of this Agreement, (1) reduce the Borrowing Base (as defined in the Credit Agreement) to
$100,000,000, (2) provide for a waiver of compliance with the Leverage Ratio covenant set forth in
Section 6.8(b) of the Credit Agreement each day from March 31, 2009 through the Effective Date (the
“Covenant Waiver”) and (3) make certain amendments to the Credit Agreement.
THEREFORE, the Company, the Administrative Agent and the Lenders hereby agree as follows:
Section 1. Defined Terms. As used in this Agreement, each of the terms defined in the
opening paragraph and the Recitals above shall have the meanings herein assigned. Each term
defined in the Credit Agreement and used herein without definition shall have the meaning assigned
to such term in the Credit Agreement, unless expressly provided to the contrary.
Section 2. Other Definitional Provisions. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless
otherwise specified. All references to instruments, documents, contracts, and agreements are
references to such instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise specified. The words
“hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement. The term
“including” means “including, without limitation,”. Paragraph headings have been inserted in this
Agreement as a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the interpretation of any
provision of this Agreement.
Section 3. Covenant Waiver. The Lenders agree, subject to the terms and conditions of
this Agreement, to the Covenant Waiver. The waiver by the Lenders described in this Section 3 is
contingent upon the satisfaction of the conditions precedent set forth below and is limited to the
Covenant Waiver. Such waiver is limited to the extent described herein and shall not be construed
to be a consent to or permanent waiver of any provision in Section 6.8(b) of the Credit Agreement,
or any other terms, provisions, covenants, warranties, or agreements contained in the Credit
Agreement or in any of the other Credit Documents. The Lenders reserve the right to exercise any
rights and remedies available to them in connection with any other present or future
defaults with
respect to the Credit Agreement or any other provision of any Credit Document. The description herein of the Covenant Waiver is based upon
information provided to the Lenders on or prior to the date hereof and shall not be deemed to
exclude the existence of any Defaults or Events of Default other than the Event of Default which
may exist as of March 31, 2009 under Section 6.8(b) of the Credit Agreement if the Lenders do not
agree to the Covenant Waiver. The failure of the Lenders to give notice to the Company of any such
other Default or Event of Default is not intended to be nor shall be a waiver thereof. The Company
hereby agrees and acknowledges that the Lenders require and will require strict performance by the
Company of all of its obligations, agreements, and covenants contained in the Credit Agreement and
the other Credit Documents, and no inaction or action regarding any Default or Event of Default is
intended to be or shall be a waiver thereof.
Section 4. Amendments to the Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby amended by deleting the definitions of
“Applicable Margin”, “Asset Sale”, “Base Rate” and “Borrowing Base” in their entirety and replacing
them with the following corresponding terms:
“Applicable Margin” means, on any date of its determination, a percentage per
annum, determined by reference to the Utilization in effect at BNPP’s close of
business in New York City on such date for the Type of Loan or the Commitment Fee as
set forth below:
| Applicable Margin | Applicable Margin for | Applicable Margin for | ||||||||||
| Utilization | for Base Rate Loans | Eurodollar Rate Loans | Commitment Fees | |||||||||
< 25% |
1.00 | % | 2.50 | % | 0.50 | % | ||||||
³
25% |
||||||||||||
< 50% |
1.25 | % | 2.75 | % | 0.50 | % | ||||||
³
50% |
||||||||||||
< 75% |
1.50 | % | 3.00 | % | 0.50 | % | ||||||
³
75% |
1.75 | % | 3.25 | % | 0.50 | % | ||||||
The Applicable Margin shall increase by 2.00% during any Deficiency Period.
“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale
and leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than Company or any Guarantor), in one
transaction or a series of transactions, of all or any part of Company’s or any of
its Restricted Subsidiaries’ businesses, assets or properties of any kind, including
Production Payments, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without limitation,
the Capital Stock or Securities of any of Company’s Restricted Subsidiaries, other
than (i) Hydrocarbons (or other inventory or goods) sold or leased in the ordinary
course of business (excluding any such sales by operations or divisions discontinued
or to be discontinued), (ii) during the Adjustment Period, sales of assets (other
than Hydrocarbons, other inventory or goods) for aggregate consideration of less
than $100,000 with respect to any transaction or series of related transactions and
less than $500,000 in the aggregate during any Fiscal Year, and (iii) upon
expiration of the Adjustment Period, sales of assets (other than Hydrocarbons, other
inventory or goods) for aggregate consideration of less than $250,000 with respect
to any transaction or series of related transactions and less than $1,500,000 in the
aggregate during any Fiscal Year.
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“Base Rate” means, for any day, a rate per annum equal to the greatest of the
then determinable (a) Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%, and (c) the LIBO Rate on such day
(or if such day is not a Business Day, the immediately preceding Business Day) plus
1.50%, provided that, in the context of this definition of Base Rate and for the
avoidance of doubt, “LIBO Rate” means, for any day, the rate as quoted to BNPP’s
London office for Dollar deposits of $5,000,000 having a one-month maturity at
approximately 11:00 a.m. London time on such day. Any change in the Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate
shall be effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.
“Borrowing Base” means at any particular time, the least of (a) the Dollar
amount determined in accordance with Section 2.3 on account of Proven Reserves
attributable to Oil and Gas Properties of the Company and the Guarantors subject to
an Acceptable Security Interest and described in the most recent Independent
Engineering Report or Internal Engineering Report, as applicable, delivered to the
Administrative Agent and the Lenders pursuant to Section 2.3, before taking into
account any reduction to such amount based on the principal amount of the Senior
Secured Notes then outstanding (which, as of the Effective Date of the Fourth
Amendment, is equal to $159,475,000), less 30% of the outstanding principal
amount of the Senior Secured Notes; (b) the amount of the Permitted First Priority
Secured Indebtedness, as such term is defined in the ▇. ▇▇▇▇ Swap; (c) such amount
as may be designated in writing by the Company to the Administrative Agent and the
Revolving Lenders upon any redetermination under Section 2.3(b)(ii); and (d) such
amount as may be designated by the Administrative Agent and the Revolving Lenders
upon any redetermination under Section 2.3, subject to Section 2.3(e).
(b) Section 1.01 of the Credit Agreement is hereby amended by adding the following new defined
terms in alphabetical order:
“Adjustment Period” means the period commencing on the Effective Date of the
Fourth Amendment and expiring on the date that the Borrower has repaid or prepaid
the Revolving Loans in an aggregate amount equal to $30,000,000 and the Borrowing
Base has been, pursuant to Section 2.3(f), reduced by $30,000,000 in the aggregate;
provided that, upon such expiration, the Adjustment Period shall not be reinstated
regardless of any subsequent increases to the Borrowing Base.
“Effective Date of the Fourth Amendment” means the effective date of the Fourth
Amendment and Agreement, which amends this Agreement.
“Equity Contribution” means an equity capital contribution of cash or Cash
Equivalents by EnerVest or any other equity holder of the Company.
“Equity Issuance” means any issuance of equity securities or any other Capital
Stock or Securities (including any preferred equity securities) by the Company or
any of its Domestic Subsidiaries other than (i) Capital Stock issued to the Company
or to a Guarantor, (ii) common, non-convertible Capital Stock issued pursuant to
employee or director and officer stock option plans in the ordinary course of
business, or (iii) common, non-convertible Capital Stock issued to the seller(s) as
consideration in connection with any Permitted Acquisition that is permitted under
Section 6.9(e).
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“Commodity Transactions” means any and all swaps, options, forward contracts,
cap transactions, floor transactions, collar transactions, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including any
options to enter into any of the foregoing and any related confirmations) and
related to oil, gas or oil and gas, whether or not any such transaction is governed
by or subject to any Swap Agreement.
“Hedge Restructure” means (a) the entering into or purchase of any Commodity
Transaction and (b) any supplement, modification, novation, termination, or
unwinding of any Commodity Transaction, the effect of which, in either case, is to
cancel or modify any existing hedge position established under the ▇. ▇▇▇▇ Swap.
“Non-Ordinary Course Events” means, collectively, (a) Asset Sales, regardless
of whether such Asset Sales are permitted under Section 6.9 hereof, (b) Equity
Contributions, and (c) Equity Issuances.
“Non-Ordinary Course Proceeds” means (a) with respect to any Asset Sale, all
cash and Cash Equivalents received by any Credit Party from such Asset Sale after
(i) payment of, or provision for, all reasonable brokerage commissions, marketing
expenses, estimated cash taxes attributable from such Asset Sale, and other
reasonable out-of-pocket fees and expenses actually incurred directly in connection
with such Asset Sale and (ii) the amount of reserves recorded in accordance with
GAAP for indemnity or similar obligations of the Credit Parties directly related to
such Asset Sale; (b) with respect to any Equity Contribution, the amount of such
Equity Contribution after payment of all reasonable expenses of accountants,
lawyers, appraisers and other professional advisors, if any, and other reasonable
out-of-pocket fees and expenses actually incurred directly in connection with such
Equity Contribution; and (c) with respect to any Equity Issuance, all cash and Cash
Equivalents received by any Credit Party from such Equity Issuance after payment of
all reasonable underwriter fees and expenses, Securities and Exchange Commission and
blue sky fees, if any, reasonable expenses of accountants, lawyers and other
professional advisors, brokerage commissions and other reasonable out-of-pocket fees
and expenses actually incurred directly in connection with such Equity Issuance.
(c) Section 2.3 of the Credit Agreement is hereby amended by replacing each reference to “75%”
found therein with a reference to “80%”.
(d) Section 2.3(a) of the Credit Agreement is hereby amended by deleting the last sentence
thereof in its entirety and replacing it with the following:
Such initial Borrowing Base shall be subject to adjustment from time to time in
accordance with the definition thereof, and shall be determined in accordance with
the standards set forth in Section 2.3(d) and is subject to periodic redetermination
pursuant to Sections 2.3(b) and 2.3(c) and periodic reduction pursuant to Section
2.3(f).
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(e) Section 2.3(b)(i) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(i) The Company shall deliver to the Administrative Agent and each of the
Revolving Lenders on or before February 15th of each year beginning
February 15, 2010, an Independent Engineering Report dated effective as of the
immediately preceding January 1, and such other information as may be reasonably
requested by any Revolving Lender with respect to the Oil and Gas Properties
included or to be included in the Borrowing Base. The Administrative Agent shall
promptly, and in any event within 30 days after the Administrative Agent’s and the
Revolving Lenders’ receipt of such Independent Engineering Report and other
information, deliver to each Revolving Lender the Administrative Agent’s
recommendation for the redetermined Borrowing Base. The Administrative Agent and
the Revolving Lenders shall promptly, and in any event on the later of (A) March
15th and (B) 15 days after the Revolving Lenders’ receipt of the
Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance
with Section 2.3(d), and the Administrative Agent shall promptly notify the Company
in writing of the amount of the Borrowing Base as so redetermined, which
redetermined Borrowing Base shall become effective as of the date of such notice.
(f) Section 2.3(b)(ii) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(ii) The Company shall deliver to the Administrative Agent and each of the
Revolving Lenders on or before August 15th of each year beginning August 15, 2009,
an Internal Engineering Report dated effective as of the immediately preceding July
1 and such other information as may be reasonably requested by the Administrative
Agent or any Revolving Lender with respect to the Oil and Gas Properties included or
to be included in the Borrowing Base. The Administrative Agent shall promptly, and
in any event within 30 days after the Administrative Agent’s and the Revolving
Lenders’ receipt of such Internal Engineering Report and other information, deliver
to each Revolving Lender the Administrative Agent’s recommendation for the
redetermined Borrowing Base. The Administrative Agent and the Revolving Lenders
shall promptly, and in any event on the later of (A) September 15th and (B) 15 days
after the Revolving Lenders’ receipt of the Administrative Agent’s recommendation,
redetermine the Borrowing Base in accordance with Section 2.3(d), and the
Administrative Agent shall promptly notify the Company in writing of the amount of
the Borrowing Base as so redetermined, which redetermined Borrowing Base shall
become effective as of the date of such notice.
(g) Section 2.3 of the Credit Agreement is hereby amended by adding the following new clause
(f) to the end thereof:
(f) Mandatory Reduction. During the Adjustment Period, each repayment
or prepayment of outstanding Revolving Loans shall automatically, and effective as
of the date such repayment or prepayment is effected, reduce the then effective
Borrowing Base by the amount of such repayment or prepayment.
(h) Section 2.6 of the Credit Agreement is hereby amended by adding the following to the end
of the first sentence thereof:
; provided however, no portion of the proceeds of any Credit Extension shall be
used to fund any obligations, liabilities, fees, or other amounts owing or otherwise
occurring with respect to a Hedge Restructure.
(i) Section 2.14(a) of the Credit Agreement is hereby amended by deleting the reference to
“Hedge L/C Exposure” found in clause (i) thereof with a reference to “Letter of Credit Usage.”
5
(j) Section 2.14(c) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(c) Non-Ordinary Course Events. If (y) the Adjustment Period is in
effect or (z) the Total Utilization of Revolving Commitments exceeds the lesser of
the Borrowing Base or the aggregate Revolving Commitments, then, upon the occurrence
of a Non-Ordinary Course Event, the Company shall prepay or repay the Loans and
provide cash collateral for the Letter of Credit Usage with the Non-Ordinary Course
Proceeds thereof in the order and as set forth below:
(i) unless the mandatory prepayment required under Section 2.14(d) below shall
have been made, the first $20,000,000 of Non-Ordinary Course Proceeds, in the
aggregate, shall be applied to prepay the Revolving Loans;
(ii) the next $40,000,000 of Non-Ordinary Course Proceeds (or the first
$60,000,000 of Non-Ordinary Course Proceeds if the mandatory prepayment required
under Section 2.14(d) has been made as required therein), in the aggregate, shall be
applied, at the option of the Company, to fund any one or more of the following:
(A) effect any Hedge Restructure so long as (1) after giving effect to such
Hedge Restructure, the Company remains protected against a decline in commodity
prices at the same levels that are in effect on the Effective Date of the Fourth
Amendment, and (2) prior to effecting such Hedge Restructure, the Hedge Letter
of Credit Usage shall have been reduced in an amount, and subject to terms,
satisfactory to the Administrative Agent,
(B) prepay the Revolving Loans, or
(C) drilling and development costs and expenses, Consolidated Capital
Expenditures, the acquisition of Oil and Gas Properties or for any other general
corporate purposes that is otherwise permitted under this Agreement; and
(iii) 50% of all Non-Ordinary Course Proceeds in excess of the first
$60,000,000 which is to be applied as provided in clauses (i) and (ii) above, shall
be applied to prepay the Revolving Loans, and if no Revolving Loans are outstanding,
make deposits into a cash collateral account acceptable to the Administrative Agent
to provide cash collateral for the Letter of Credit Usage.
Prepayments of the Loans and deposits of cash collateral as required pursuant to
this Section 2.14(c) shall occur no later than the third Business Day following the
date of receipt by Company or any of its Subsidiaries of any Non-Ordinary Course
Proceeds. Each prepayment of Loans pursuant to this Section 2.14(c) shall be
accompanied by accrued interest on the amount prepaid to the date of such prepayment
and amounts, if any, required to be paid pursuant to Section 2.18(c) as a result of
such prepayment being made on such date. Each prepayment under this Section 2.14(c)
shall be applied to the Loans as provided above but otherwise as determined by the
Administrative Agent and agreed to by the Requisite Revolving Lenders in their sole
discretion.
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(k) Section 2.14(d) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(d) Mandatory Prepayment of Revolving Loans. Notwithstanding any terms
to the contrary contained herein and so long as the Adjustment Period is in effect,
the Company shall prepay the Revolving Loans on July 15, 2009 in an amount equal to
(i) $20,000,000 less (ii) the aggregate amount of prepayments of Revolving Loans
made after the Effective Date of the Fourth Amendment. Such prepayment of the
Revolving Loans pursuant to this Section 2.14(d) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if any,
required to be paid pursuant to Section 2.18(c) as a result of such prepayment being
made on such date.
(l) Section 5.11(b) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(b) No later than ninety (90) days after June 30th and December 31st of each
year (other than December 31, 2008) and no later than one-hundred fifty (150) days
after December 31, 2008, Company and the Guarantors shall, if required, take all
such actions and execute and deliver, or cause to be executed and delivered, all
such mortgages, documents, instruments, agreements, opinions and certificates
similar to those described in Section 3.1(i) with respect to additional Hydrocarbon
Interests which have not otherwise been made subject to the Lien of the Collateral
Documents in favor of Collateral Trustee, for the benefit of Secured Parties, such
that the aggregate of Hydrocarbon Interests subject to the Lien of the Collateral
Documents in favor of Collateral Trustee, for the benefit of Secured Parties, shall
represent no less than 80% of the Borrowing Base value of the Proven Reserves of
Company and the Guarantors.
(m) Section 5.13 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
5.13 Swap Agreements. It is contemplated by the Company that the ▇. ▇▇▇▇ Swap will
remain in place during the term of this Agreement on terms and conditions
satisfactory to the Administrative Agent; provided, however, (a) the Company shall
have the right to terminate the ▇. ▇▇▇▇ Swap, but only if the Borrowing Base shall
have been redetermined before giving effect to the termination and, after giving
effect thereto, no Event of Default would exist and Total Utilization would not
exceed the lesser of the Borrowing Base and the Revolving Commitments, and (b) the
Company may effect any Hedge Restructure or otherwise amend, supplement or modify
the ▇. ▇▇▇▇ Swap so long as (i) no Event of Default exists or would exist as a
result thereof, (ii) after giving effect thereto the Company would remain protected
against a decline in commodity prices at the same levels that are in effect on the
Effective Date of the Fourth Amendment, (iii) before giving effect thereto the Hedge
Letter of Credit Usage shall have been reduced in an amount, and subject to terms,
satisfactory to the Administrative Agent, (iv) the terms thereof does not require
any additional collateral or margin requirements from the Company or any other
Credit Party, and (v) the other terms thereof are not more onerous to the Company or
any other Credit Party than those terms that were in existence on the Closing Date
as reasonably determined by the Administrative Agent.
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(n) Section 6.5 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
6.5 Restricted Junior Payments. No Credit Party shall, nor shall it permit any
of its Restricted Subsidiaries or Affiliates through any manner or means or through
any other Person to (a) directly or indirectly, declare, order, pay, make or set
apart, or agree to declare, order, pay, make or set apart, any sum for any
Restricted Junior Payment, including but not limited to, principal payments on the
Senior Secured Indebtedness but excluding interest payments on any Senior Secured
Indebtedness or (b) otherwise make any optional or voluntary repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for value
(or the segregation of funds with respect to any of the foregoing in this clause
(b)) of the Senior Secured Indebtedness.
(o) Section 6.8(a) of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
(a) Interest Coverage Ratio. Company shall not permit the Interest
Coverage Ratio as of the last day of each Fiscal Quarter, to be less than (i) 2.50
to 1.00 for each Fiscal Quarter ending on or before ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 2.00 to
1.00 for the Fiscal Quarters ending September 30, 2009, December 31, 2009 and March
31, 2010 , and (ii) 2.25 to 1.00 for each Fiscal Quarter ending on or after June 30,
2010; provided that the Interest Coverage Ratio test under this Section
6.8(a) shall not apply for the Fiscal Quarter ending June 30, 2009.
(p) Section 6.8(b) of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
(b) Leverage Ratio. Company shall not permit, as of each day, the
Leverage Ratio for the four Fiscal Quarters for which financial statements have most
recently been required to be delivered under this Agreement immediately preceding
such day to exceed (i) 5.375 to 1.00 from the earlier of the date that Borrower has
delivered its financial statements for the Fiscal Quarter ending September 30, 2009
pursuant to Section 5.1(a) or November 16, 2009 (the “Initial Leverage Test
Date”) through and including ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 5.25 to 1.00 from January
1, 2010 through and including March 31, 2010, and (iii) 5.00 to 1.00 thereafter;
provided that, the Leverage Ratio test under this Section 6.8(b) shall not apply at
any time from the Effective Date of the Fourth Amendment through the Initial
Leverage Test Date.
(q) Section 6.9 of the Credit Agreement is hereby amended by deleting clauses (c), (f), (g)
and (h) in their entirety and replacing them with the following:
(c) (i) during the Adjustment Period, any Asset Sale so long as the proceeds
thereof are applied in accordance with Section 2.14(c); and (ii) upon expiration of
the Adjustment Period, any Asset Sale, the proceeds of which (valued at the
principal amount thereof in the case of non-cash proceeds consisting of notes or
other debt Securities and valued at fair market value in the case of other non-cash
proceeds) (A) are less than $5,000,000 with respect to any single Asset Sale or
series of related Asset Sales and (B) when aggregated with the proceeds of all other
Asset Sales made after the expiration of the Adjustment Period, are less than
$10,000,000; provided that, with respect to any Asset Sale permitted under
this clause (c), (1) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof (determined in good faith by
a Financial Officer of Company), and (2) no less than 75% thereof shall be paid in
cash.
(f) [Reserved].
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(g) the trade or exchange by Company or any Restricted Subsidiary of any Oil
and Gas Property (or interest therein) owned or held by Company or such Restricted
Subsidiary and located in an area for any other Oil and Gas Property (or interest
therein) owned or held by another Person and located in the same area;
provided, that, (i) the aggregate value of trades or exchanges permitted by
this paragraph (g) shall not exceed $5,000,000 during any six-month period
commencing January 1 and ending June 30 or commencing July 1 and ending December 31,
(ii) such trade or exchange may include cash or Cash Equivalents necessary in order
to achieve an exchange of equivalent value , and (iii) such trade or exchange occurs
in the ordinary course of business for the purpose of developing Oil and Gas
Properties that the Company or any Restricted Subsidiary owns which are not included
in such trade or exchange.
(h) [Reserved].
(r) Section 6.15 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:
6.15 Amendments or Waivers of Certain Related Agreements. No Credit Party shall nor
shall it permit any of its Restricted Subsidiaries to, agree to any material
amendment, restatement, supplement or other modification to, or waiver of, any of
its material rights under any Related Agreement (other than the Senior Secured
Indebtedness and future transactions otherwise permitted by the terms of this
Agreement) after the Closing Date without in each case obtaining the prior written
consent of Requisite Lenders to such amendment, restatement, supplement or other
modification or waiver; provided that, the Company may terminate, amend, supplement
or otherwise modify the ▇. ▇▇▇▇ Swap in compliance with the terms of Section 5.13 of
this Agreement.
Section 5. Borrowing Base. Subject to the terms of this Agreement, the parties hereto
agree that, as of the Effective Date, the Borrowing Base shall be equal to $100,000,000 and such
Borrowing Base shall remain in effect at such amount until the Borrowing Base is redetermined or
reduced in accordance with the Credit Agreement, as amended hereby.
Section 6. Company Representations and Warranties. The Company represents and
warrants that, after giving effect to this Agreement: (a) the representations and warranties
contained in the Credit Agreement and the representations and warranties contained in the other
Credit Documents, are true and correct in all material respects on and as of the Effective Date as
if made on as and as of such date except to the extent that any such representation or warranty
expressly relates solely to an earlier date, in which case such representation or warranty is true
and correct in all material respects as of such earlier date; (b) no Default has occurred and is
continuing; (c) the execution, delivery and performance of this Agreement are within the corporate
power and authority of the Company and have been duly authorized by appropriate corporate and
governing action and proceedings; (d) this Agreement constitutes the legal, valid, and binding
obligation of the Company enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of
creditors generally and general principles of equity; (e) there are no governmental or other third
party consents, licenses and approvals required in connection with the execution, delivery,
performance, validity and enforceability of this Agreement; and (f) the Liens under the Security
Instruments are valid and subsisting and secure Company’s obligations under the Credit Documents.
9
Section 7. Conditions to Effectiveness. This Agreement shall become effective on the
Effective Date and enforceable against the Company, the Administrative Agent, and the Lenders upon
the occurrence of the following conditions precedent:
(a) The Administrative Agent shall have received multiple original counterparts, as requested
by the Administrative Agent, of this Agreement duly and validly executed and delivered by duly
authorized officers of the Company, the Administrative Agent and the Requisite Lenders and the fee
letter dated the date hereof between the Administrative Agent and the Company.
(b) The aggregate outstanding amount of the Total Utilization of Revolving Commitments shall
be less than or equal to $95,000,000.
(c) The Company shall have paid to the Administrative Agent for the ratable benefit of the
Lenders a waiver and amendment fee in the amount of $250,000. This fee shall be non-refundable and
fully earned when paid.
(d) No Default shall have occurred and be continuing as of the Effective Date.
(e) The representations and warranties in this Agreement shall be true and correct in all
material respects.
(f) The Company shall have paid all costs and expenses which have been invoiced and are
payable pursuant to Section 10.2 of the Credit Agreement.
Section 8. Acknowledgments and Agreements.
(a) The Company acknowledges that on the date hereof all Obligations are payable without
defense, offset, counterclaim or recoupment.
(b) The Administrative Agent and the Lenders hereby expressly reserve all of their rights,
remedies, and claims under the Credit Documents. Nothing in this Agreement shall constitute a
waiver or relinquishment of (i) any Default or Event of Default under any of the Credit Documents,
(ii) any of the agreements, terms or conditions contained in any of the Credit Documents, (iii) any
rights or remedies of the Administrative Agent or any Lender with respect to the Credit Documents,
or (iv) the rights of the Administrative Agent or any Lender to collect the full amounts owing to
them under the Credit Documents.
(c) Each of the Company, the Administrative Agent and the Lenders does hereby adopt, ratify,
and confirm the Credit Agreement, as amended hereby, and acknowledges and agrees that the Credit
Agreement, as amended hereby, is and remains in full force and effect, and the Company acknowledges
and agrees that its liabilities and obligations under the Credit Agreement, as amended hereby, are
not impaired in any respect by this Agreement. From and after the Effective Date, all references to
the Credit Agreement and the Credit Documents shall mean such Credit Agreement and such Credit
Documents as amended by this Agreement.
(d) This Agreement is a Credit Document for the purposes of the provisions of the other Credit
Documents. Without limiting the foregoing, any breach of representations, warranties, and
covenants under this Agreement shall be a Default or Event of Default, as applicable, under the
Credit Agreement.
10
Section 9. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original and all of which, taken together, constitute a single
instrument. This Agreement may be executed by facsimile signature and all such signatures shall be
effective as originals.
Section 10. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns permitted pursuant to
the Credit Agreement.
Section 11. Invalidity. In the event that any one or more of the provisions contained
in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement.
Section 12. Governing Law. This Agreement shall be deemed to be a contract made under
and shall be governed by and construed in accordance with the laws of the State of New York.
Section 13. Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS
AGREEMENT, THE NOTES, AND THE OTHER CREDIT DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Signature pages follow.]
11
EXECUTED effective as of the date first above written.
| COMPANY: | ▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION | |||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ | |||||||
| Title: | President and Chief Operating Officer | |||||||
ADMINISTRATIVE AGENT/ |
||||||||
| LENDER: | BNP PARIBAS, | |||||||
| as Administrative Agent and as Lender | ||||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||
| Title: | Director | |||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||||
| Title: | Vice President | |||||||
| LENDER: | JPMORGAN CHASE BANK, N.A. | |||||||
| as Lender | ||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| Title: | Vice President | |||||||
| LENDER: | AMEGY BANK NATIONAL ASSOCIATION, | |||||||
| as Lender | ||||||||
| By: | /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||||
| Name: | W. ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||||
| Title: | Senior Vice President | |||||||