EXHIBIT 10.4
FIRST AMENDMENT
TO
CREDIT AGREEMENT
DATED APRIL 9, 1999
BY AND BETWEEN ATP OIL & GAS CORPORATION
AND AQUILA ENERGY CAPITAL CORPORATION
This First Amendment ("First Amendment") to the Credit Agreement dated
April 9, 1999, by and between ATP OIL & GAS CORPORATION, a Texas corporation
(the "Borrower") and AQUILA ENERGY CAPITAL CORPORATION, a Delaware corporation
(the "Lender"), is entered into effective on the 23rd day of June, 1999.
W I T N E S S E T H:
A. Borrower and Lender heretofore entered into a Credit Agreement dated
April 9, 1999, but effective March 31, 1999 (the "Credit Agreement").
B. Borrower and Lender hereby desire to amend the Credit Agreement subject
to the terms and conditions contained herein.
C. Capitalized terms used, but not defined herein, shall have the meanings
prescribed therefor in the Credit Agreement.
NOW THEREFORE, in consideration of the mutual promises herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by Borrower and Lender, and each intending to be legally
bound hereby, the Lender and Borrower agree as follows:
I. Specific Amendments to Credit Agreement
Article I of the Credit Agreement is hereby amended by revising the
following defined terms in their entirety to read as follows:
"Advancing Note" means the Amended and Restated Advancing Note
attached as Exhibit "B" to the First Amendment, which amends and restates
the Advancing Note originally described and defined in Section 2.1(a).
"Loan Termination Date" means the earlier of (a) June 23, 2002, (b)
the date of payment and performance in full of all the Obligations of
Borrower under the Loan Documents (other than the Overriding Royalty
Interest Conveyance), and (c) the date on which Lender notifies Borrower,
as provided in Section 10.2, of the acceleration of payment of all
Obligations because of the occurrence of an Event of Default.
"Loans" means, collectively, the Initial Loan, the Royalty Acquisition
Loan and the Development Loans and "Loan" means either the Initial Loan,
the Royalty Acquisition Loan or any Development Loan as described in
Section 2.1.
"Note" means the Amended and Restated Advancing Note in the form
attached as Exhibit "B" to the First Amendment and any amendment,
restatement, replacement or extension thereof.
"ORRI" means that overriding royalty interest in Hydrocarbons
produced, saved and sold or used off the premises of the relevant Lease,
attributable to the undivided interest of the Borrower constituting each
Property, conveyed by Borrower to Lender pursuant to the Overriding Royalty
Interest Conveyances dated the Closing Date and dated of even date with the
First Amendment.
"Overriding Royalty Interest Conveyance" means, collectively,
assignments, in form and substance acceptable to Lender, pursuant to which
Borrower grants in favor of Lender an overriding royalty interest equal to
six and one-fourth percent (6.25%) of Hydrocarbons produced, saved and sold
or used off the premises of the relevant Lease, attributable to the
undivided interest of the Borrower constituting each Property, calculated
and paid on the same basis as royalty payable to the United States
Department of Interior, Minerals Management Service pursuant to applicable
rules and regulations, such grants to be made on the Closing Date and of
even date with the First Amendment, but applicable only as to production on
and after the first day of the first calendar month following the Loan
Termination Date.
"Title Opinions" means those certain title opinions addressed to
Borrower and Lender and dated on or prior to the Closing Date covering the
Properties described on Exhibit A attached hereto and on or prior to the
date of the First Amendment covering the Properties described on Exhibit A
attached to the First Amendment, as the same may be or are required to be
updated under this Agreement.
Article I of the Credit Agreement is hereby further amended by adding the
following definitions thereto:
"Additional Facility Fee" means the fee owed by Borrower to Lender as
consideration, in part, for structuring and entering into the transactions
contemplated under the First Amendment, as set forth in Section 7.1(z).
"First Amendment" means that certain First Amendment to the Credit
Agreement executed by Lender and Borrower effective on June 23, 1999.
"KCS Purchase and Sale Agreement" means that certain Purchase and Sale
Agreement dated June 23, 1999, by and between KCS, as Seller, and Borrower,
as Buyer.
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"Royalty Acquisition Loan" means the loan made by Lender to Borrower
in part for the payment of all or a portion of the consideration for the
acquisition by Borrower from KCS Energy Services, Inc. of the Royalty
Interest and related Royalty Hydrocarbons effective April 1, 1999 pursuant
to the KCS Purchase and Sale Agreement.
"Royalty Hydrocarbons" has the meaning prescribed therefor in the
"Conveyance" defined in the KCS Purchase and Sale Agreement.
"Royalty Interest" has the meaning prescribed therefor in the
"Conveyance" defined in the KCS Purchase and Sale Agreement.
Section 2.1(a) of the Credit Agreement is hereby amended by inserting in
the first line thereof, between the paragraph designation "(a)" and the heading
"The Initial Loan" the subparagraph designation "(i)", and by amending the text
that appears in parenthesis in the ninth and tenth lines of Section 2.1(a) to
read as follows: "(together with the Royalty Acquisition Loan described in
Section 2.1(a)(ii) below and the Development Loans, if any, described in Section
2.1(b) below)".
Section 2.1(a) of the Credit Agreement is hereby further amended by adding
the following new subparagraph 2.1(a)(ii):
(ii) The Royalty Acquisition Loan. Borrower intends to acquire the
Royalty Interest and Royalty Hydrocarbons pursuant to the KCS Purchase and
Sale Agreement. To facilitate such acquisition and to pay other amounts
due by Borrower as provided in Section 2.2, Lender shall, subject to the
terms and conditions set forth below, make available to Borrower a loan in
the amount of Twenty One Million Eight Hundred Forty-One Thousand Three
Hundred and No/100 Dollars ($21,841,300.00), to be paid in U.S. dollars by
wire transfer, and such Loan shall be evidenced (together with the Initial
Loan and the Development Loans, if any, described in Section 2.1(b) below)
by the Advancing Note.
Section 2.1(b) of the Credit Agreement is hereby amended by revising the
text that appears in parenthesis in the first line of the second grammatical
paragraph thereof to read as follows: "(together with the Initial Loan and the
Royalty Acquisition Loan)".
Section 2.1(b) of the Credit Agreement is hereby further amended by
replacing the dollar amount "27,800,000.00" that appears in the seventh and the
last lines thereof with the dollar amount "$30,330,000.00".
Section 2.2 of the Credit Agreement is hereby amended by inserting the
following new text after the first sentence thereof:
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Royalty Acquisition Loan proceeds shall be used by Borrower for the
purposes of: (a) acquiring the Royalty Interest and Royalty Hydrocarbons
pursuant to the KCS Purchase and Sale Agreement and (b) paying the
Additional Facility Fee pursuant to Section 7.1(z) hereof.
Section 3.4, Account Debtors, of the Credit Agreement is hereby amended by
adding the following new text at the end of that section:
Borrower shall also use commercially reasonable efforts to assist
Lender in obtaining, within sixty (60) days after the funding of the
Royalty Acquisition Loan, from all Purchasers of Hydrocarbons who purchase
Hydrocarbons from the Properties described on Exhibit "A" to the First
Amendment, to remit all proceeds from sales of all production from or
allocable to Borrower's respective Net Revenue Interests constituting such
respective Properties to the Cash Collateral Account.
Section 7.1(z) of the Credit Agreement is hereby amended in its entirety to
read as follows:
(z) Facility Fee. A Facility Fee in the amount of $465,000.00 was
paid by Borrower to Lender at Closing out of the advances constituting the
Initial Loan. An additional facility fee (the "Additional Facility Fee")
in the amount of $241,300.00 shall be payable by Borrower to Lender out of
advances constituting the Royalty Acquisition Loan. The amount of the
Facility Fee is deemed to have been advanced by Lender to Borrower on the
Closing Date as a part of the Initial Loan, with such advance having been
contemporaneously paid by Borrower to Lender. The amount of the Additional
Facility Fee will be deemed to have been advanced by Lender to Borrower
contemporaneously with the funding of the Royalty Acquisition Loan, with
such advance having been contemporaneously paid by Borrower to Lender. The
face amount of the Note is the sum of the Initial Loan (which includes the
amount of the Facility Fee), the Royalty Acquisition Loan (which includes
the amount of the Additional Facility Fee) and the maximum amount of the
Development Loans.
Section 8.3 of the Credit Agreement is hereby amended by adding the
following new text at the end of that section:
Contemporaneously with the funding of the Royalty Acquisition Loan,
Borrower shall assign to Lender the ORRI applicable to the Properties
described on Exhibit "A" to the First Amendment by executing and delivering
to Lender an Overriding Royalty Interest Conveyance in form and substance
mutually satisfactory to Lender and Borrower.
Article IX of the Credit Agreement is hereby amended by adding the
following new Section 9.4:
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9.4 Conditions Precedent in Connection with the First Amendment. The
obligation of the Lender to make the Loan advances on or about June 23, 1999,
referred to in Section 2.1(a)(ii) of this Agreement is subject to satisfaction
of the following conditions precedent:
(a) Receipt of Amended and Restated Advancing Note, First Amendment and
Certificate of Compliance. Lender shall have received the Amended and
Restated Advancing Note, multiple counterparts of the First Amendment and
the Certificate of Compliance in the form attached as Exhibit "C" to the
First Amendment duly executed by an authorized officer of Borrower.
(b) Receipt of Additional Loan Documents. Lender shall have received the
Mortgages, Security Agreement, Overriding Royalty Interest Conveyance,
Letters in Lieu of Transfer Orders and Notices of Assignment of Proceeds
(or any amendments, extensions, renewals or restatements thereof), all duly
executed and, where appropriate, acknowledged by Borrower, in form and
substance acceptable to Lender, covering the Properties described on
Exhibit A attached to the First Amendment.
(c) Additional Facility Fee. Lender shall have received the Additional
Facility Fee.
(d) Receipt of Certified Copy of Corporate Proceedings and Certificate of
Incumbency. Lender shall have received from Borrower copies of the
resolutions of the board of directors authorizing the transactions set
forth in the First Amendment and the execution of the First Amendment and
the other Loan Documents contemplated thereby, such copy or copies to be
certified by the secretary or an assistant secretary of Borrower as being
true and correct and in full force and effect as of the date of such
certificate. In addition, Lender shall have received from Borrower a
certificate of incumbency signed by the secretary or an assistant secretary
of Borrower setting for (a) the names of the officers executing the First
Amendment and the other Loan Documents contemplated thereby, (b) the
office(s) to which such persons have been elected and in which they
presently serve and (c) an original specimen signature of each such
persons.
(e) Accuracy of Representations and Warranties and No Event of Default. The
representations and warranties contained in Article IV of the Credit
Agreement shall be true and correct in all material aspects on the date of
such advances with the same effect as though such representations and
warranties had been made on such date; and no Event of Default shall have
occurred and be continuing or will have occurred at the completion of the
making of such Loan.
(f) Legal Matters Satisfactory to Special Counsel to Bank. All legal
matters incident to the consummation of the transactions contemplated by
the First Amendment shall be satisfactory to the firm of ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P., special counsel for Lender. Borrower shall have paid to ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., on the date of the First Amendment, all of Lender's legal
fees and expenses incurred to ▇▇▇▇▇▇ and ▇▇▇▇▇▇, L.L.P. in connection with
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the First Amendment and related Loan Documents, together with a deposit for
estimated recording fees in the amount of $2,000.00.
(g) KCS Purchase and Sale Agreement. All the conditions to the closing of
the KCS Purchase and Sale Agreement shall have been met to Lender's
satisfaction, in its sole discretion; the closing of the KCS Purchase and
Sale Agreement shall have contemporaneously occurred; the assignments
conveying the Royalty Interest and Royalty Hydrocarbons from KCS Energy
Services, Inc. to Borrower shall have been executed, acknowledged and
delivered by KCS to Borrower; and possession of such assignments shall have
been delivered to representatives of Lender or its counsel for recording.
(h) Releases. Lender shall received satisfactory evidence of releases of
all prior liens encumbering the Properties described on Exhibit "A" to the
First Amendment,, including, without limitation, the releases of all liens
and security interests held by CIBC Inc. and KCS Energy Services, Inc.
(i) No Material Adverse Change. No material adverse change shall have
occurred since the date of this Agreement in the condition, financial or
otherwise, of Borrower.
Exhibit A to the Credit Agreement is hereby amended by adding the schedule
of the Properties that appear on Exhibit A to this First Amendment.
Exhibit B to the Credit Agreement is hereby replaced with Exhibit B to the
First Amendment.
Schedule 2.1(b), Development Operations, of the Credit Agreement is hereby
supplemented with Supplemental Schedule 2.1(b), Development Operations, attached
to the First Amendment.
Schedule 2.8, Purchasers of Production, of the Credit Agreement is hereby
supplemented with Supplemental Schedule 2.8, Purchasers of Production, attached
to the First Amendment.
II. Reaffirmation of Representations and Warranties. To induce Lender to
enter into this First Amendment, Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Article IV of the Credit
Agreement and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:
A. The execution and delivery of this First Amendment and the
performance by Borrower of its obligations under this First Amendment are
within Borrower's power, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval (if any
shall be required), and do not and will not contravene or conflict with any
provision of law or of the Articles of Incorporation or Bylaws of Borrower
or of any agreement binding upon Borrower.
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B. The Credit Agreement as amended by this First Amendment,
represents the legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with its terms, subject as to
enforcement only to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally.
C. No Event of Default has occurred and is continuing as of the date
hereof.
III. Defined Terms. Except as amended hereby, terms used herein that are
defined in the Credit Agreement shall have the same meanings herein.
IV. Reaffirmation of Loan Agreement. This First Amendment shall be deemed
to be an amendment to the Credit Agreement, and the Credit Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Credit Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the
Credit Agreement as amended hereby.
V. Entire Agreement. The Credit Agreement, as hereby amended, embodies the
entire agreement between Borrower and Lender and supersedes all prior proposals,
agreements and understandings relating to the subject matter hereof. Borrower
certifies that it is relying on no representation, warranty, covenant or
agreement except for those set forth in the Credit Agreement as hereby amended
and the other documents previously executed or executed of even date herewith.
VI. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. This First Amendment has been entered into in ▇▇▇▇▇▇
County, Texas and shall be performable for all purposes in ▇▇▇▇▇▇ County, Texas.
Courts within the State of Texas shall have jurisdiction over any and all
disputes between Borrower and Lender, whether in law or equity, including, but
not limited to, any and all disputes arising out of or relating to this First
Amendment or any other Loan Document.
VII. Severability. Whenever possible, each provision of this First
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this First Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this First Amendment.
VIII. Section Captions. Section captions used in this First Amendment are
for convenience of reference only, and shall not affect the construction of this
First Amendment.
IX. Successors and Assigns. This First Amendment shall be binding upon
Borrower and Lender and their respective successors and assigns, and shall inure
to the benefit of Borrower and Lender, and the respective successors and assigns
of Lender.
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X. Non-Application of Chapter 346 of Texas Finance Codes. In no event
shall Chapter 346 of the Texas Finance Code (which regulates certain revolving
loan accounts and revolving tri-party accounts) apply to this Credit Agreement
as hereby amended or any other Loan Documents or the transactions contemplated
hereby.
XI. Notice. THIS FIRST AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed as of the day and year first above written.
BORROWER:
ATP Oil & Gas Corporation
By: _________________________________
T. ▇▇▇▇ ▇▇▇▇▇▇▇
President
LENDER:
Aquila Energy Capital Corporation
By: _________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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EXHIBIT "A"
PROPERTIES
1
EXHIBIT "B"
AMENDED AND RESTATED ADVANCING NOTE
1
EXHIBIT "C"
FORM OF CERTIFICATE OF COMPLIANCE
1
SUPPLEMENTAL SCHEDULE 2.1(B)
ADDITIONAL DEVELOPMENT OPERATIONS
1
SUPPLEMENTAL SCHEDULE 2.8
PURCHASERS OF PRODUCTION
1