1
EXHIBIT 10.1(m)
FOURTH AMENDMENT TO CREDIT AGREEMENT
------------------------------------
This Fourth Amendment to Credit Agreement (this "AMENDMENT") is entered
into effective January 27, 1999, by and among RANGE RESOURCES CORPORATION
(formerly Lomak Petroleum, Inc.), a Delaware corporation ("BORROWER"), BANK ONE,
TEXAS, N.A., as Administrative Agent ("BANK ONE" or "ADMINISTRATIVE AGENT"),
CHASE BANK OF TEXAS, N.A., as Syndication Agent ("CHASE"), NATIONSBANK, N.A., as
Documentation Agent ("NATIONSBANK"), and Lenders (as defined in the Credit
Agreement).
RECITALS:
---------
A. Borrower and Lenders entered into a Credit Agreement dated February
14, 1997, as amended by a First Amendment dated September 30, 1997, by a Second
Amendment dated May 1, 1998, and by a Third Amendment dated August 25, 1998 (as
amended, the "CREDIT AGREEMENT").
B. Pursuant to SECTION 4.02 of the Credit Agreement, Lenders have
conducted a Periodic Determination of the Borrowing Base, and Lenders and
Borrower now desire to confirm such Determination in writing.
C. Some of Borrower's Subsidiaries changed their names subsequent to
the name change of Borrower from Lomak Petroleum, Inc. to Range Resources
Corporation, and some of Borrower's Subsidiaries have been merged into other
Subsidiaries.
D. Borrower and Lenders desire to amend the Credit Agreement as
hereinafter set forth in order to, among other things, acknowledge the new
Borrowing Base resulting from the Periodic Determination and acknowledge
Borrower's current Subsidiaries and the new names of the Subsidiaries who have
changed their names.
AGREEMENT:
----------
In consideration of the premises, the representations, warranties,
covenants, and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Borrower and Lenders agree as follows, effective only upon satisfaction of each
condition precedent set forth in SECTION 4.1 below:
2
ARTICLE 1 - DEFINITIONS.
------------------------
1.1 CREDIT AGREEMENT DEFINITIONS. Capitalized terms used but not
defined in this Amendment have the meanings given such terms in the Credit
Agreement.
ARTICLE 2 - AMENDMENTS.
-----------------------
2.1 AMENDMENTS TO ARTICLE 1 - DEFINITIONS. (a) The definition of
Applicable Margin appearing in SECTION 1.01 of the Credit Agreement is hereby
amended in its entirety to read as follows:
"APPLICABLE MARGIN" means, on any day:
(a) Subject to the provisions of paragraph (b) below:
(i) through April 30, 1999, Eurodollar Rate plus 175
basis points; and
(ii) from and after April 30, 1999, Eurodollar Rate
plus 200 basis points.
(b) At and after the date of reduction of the Outstanding
Obligations and of a corresponding reduction of the Borrowing Base
(either voluntarily by Borrower or otherwise pursuant to the terms of
this Agreement) to (i) $300,000,000 or (ii) the redetermined Borrowing
Base resulting from any Determination approved by Required Lenders
subsequent to January 27, 1999, the basis points set out below,
determined based upon the type of Loan and the Borrowing Base Usage on
any such day:
BORROWING BASE USAGE
---------------------------------------------------------------------------------------------------------------------
greater than or equal to 50% less than or
less than 50% less than 75% equal to 75%
-------------------------- ----------------------------- ----------------------------- ------------------------------
Eurodollar Loans 62.5 basis points 87.5 basis points 112.5 basis
points
ABR Loans 0 basis points 0 basis points 25 basis points
(b) SECTION 1.01 of the Credit Agreement is hereby amended to add the
definition of Pledge Agreement set out below:
FOURTH AMENDMENT - Page 2
3
"PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by Borrower and its Subsidiaries, as appropriate,
substantially in the form of EXHIBIT D attached to the Fourth Amendment
to Credit Agreement dated January 27, 1999, as such Pledge Agreement
may be amended, modified, or supplemented from time to time, pursuant
which such Person will pledge 100% of the Capital Stock of Borrower's
Subsidiaries to secure the Obligations.
2.2 AMENDMENT TO ARTICLE 4 - BORROWING BASE. SECTION 4.05 of the Credit
Agreement is hereby amended in its entirety to read:
"4.05. INITIAL BORROWING BASE. Subject to the rights of
Borrower to request an earlier Special Determination pursuant to
SECTION 4.03 above and the rights of Lenders to reduce the Borrowing
Base as provided in SECTION 7.03(C) below, the Borrowing Base in effect
under this Agreement for the period from January 27, 1999, until June
30, 1999, shall be $385,000,000. As of June 30, 1999, the Borrowing
Base will be redetermined by the Required Lenders."
2.3 AMENDMENT TO ARTICLE 5 - COLLATERAL. SECTION 5.01 of the Credit
Agreement is hereby amended in its entirety to read:
"5.01. SECURITY. (a) The Obligations shall be secured by first
and prior Liens (subject only to Permitted Encumbrances) on 100% of the
issued and outstanding Capital Stock of Borrower's Subsidiaries. As of
January 27, 1999, Borrower and its Subsidiaries will execute and
deliver (i) a Pledge Agreement and (ii) any financing statements
relating thereto. Provided that no Default or Event of Default has
occurred which is continuing, if on June 30, 1999, the Outstanding
Obligations are equal to or less than the lesser of $300,000,000 or the
Borrowing Base then in effect, Lenders authorize Administrative Agent
to release, and Administrative Agent hereby agrees that it will
release, all Collateral, and execute for the benefit of Borrower and
its Subsidiaries all documents reasonably requested by Borrower to
evidence such release.
(b) On each occasion on which Borrower and its
Subsidiaries may be required to grant Liens on any asset, upon
submission to Borrower by Administrative Agent, Borrower and its
Subsidiaries shall promptly execute and deliver to Administrative
Agent, for the ratable benefit of each Lender, Security Documents in
form and substance acceptable to Administrative Agent granting first
and prior Liens (subject only to Permitted Encumbrances) on the
designated properties. Borrower acknowledges that all Mortgages now or
hereafter executed by Borrower or its Subsidiaries will be recorded
promptly and all other action
FOURTH AMENDMENT - Page 3
4
necessary to perfect the liens and security interests evidenced by the
Mortgages will be taken. Borrower represents and warrants to Lenders
that all Mortgages (i) are or will be duly authorized, executed, and
delivered by the Person executing them, (ii) constitute the valid,
binding, and enforceable obligations of each Person that executed the
Mortgages in accordance with their terms, and (iii) operate to create
in favor of Administrative Agent, for the ratable benefit of each
Lenders, first priority liens in the interests covered thereby."
2.4 AMENDMENTS TO ARTICLE 7 - REPRESENTATIONS, WARRANTIES AND
COVENANTS. SECTION 7.04 of the Credit Agreement is hereby amended in its
entirety to read:
"7.04. FINANCIAL COVENANTS. So long as this Agreement
remains in force, Borrower and its Consolidated Subsidiaries shall
maintain, on a consolidated basis, the following (all calculated in
accordance with GAAP):
(a) CONSOLIDATED TANGIBLE NET WORTH.
A minimum Consolidated Tangible Net Worth as of any date which is not
less than the sum of (i) $175,000,000, plus (ii) 50% of the net
proceeds to Borrower from the issuance of equity securities on or after
August 25, 1998 (for purposes of this SECTION 7.04(A) only,
Consolidated Tangible Net Worth shall exclude non-cash impairments of
long-lived assets as prescribed under Financial Accounting Standards
Board Statement No. 121);
(b) SENIOR DEBT INTEREST COVERAGE RATIO.
A ratio of EBITDA to Consolidated Interest Expense on Senior Debt for
each period of four immediately preceding consecutive fiscal quarters
of at least 3.0 to 1.0;
(c) TOTAL DEBT INTEREST COVERAGE RATIO.
For the fiscal quarter ended December 31, 1998, through the fiscal
quarter ending December 31, 1999, a ratio of EBITDA to Consolidated
Interest Expense on Total Debt for each period of four immediately
preceding consecutive fiscal quarters of at least 2.0 to 1.0, and for
each fiscal quarter ending after December 31, 1999, a ratio of EBITDA
to Consolidated Interest Expense on Total Debt for each period of four
immediately preceding consecutive fiscal quarters of at least 2.5 to
1.0;
(d) SENIOR DEBT LEVERAGE RATIO. For
the fiscal quarter ended December 31, 1998, through the fiscal quarter
ending December 31, 1999, a ratio of Senior Debt as of the last day of
any fiscal quarter to EBITDA for the period of four immediately
preceding fiscal quarters then ended not in excess of 4.0 to 1.0, and
for each fiscal quarter ending after December 31, 1999, a ratio of
FOURTH AMENDMENT - Page 4
5
Senior Debt as of the last day of any fiscal quarter to EBITDA for each
period of four immediately preceding consecutive fiscal quarters then
ended not in excess of 3.0 to 1.0;
(e) TOTAL DEBT LEVERAGE RATIO. For the
fiscal quarter ended December 31, 1998, through the fiscal quarter
ending December 31, 1999, a ratio of Total Debt as of the last day of
any fiscal quarter to EBITDA for the period of four immediately
preceding consecutive fiscal quarters then ended not in excess of 6.0
to 1.0, and for each fiscal quarter ending after December 31, 1999, a
ratio of Total Debt as of the last day of any fiscal quarter to EBITDA
for each period of four immediately preceding consecutive fiscal
quarters then ended not in excess of 5.0 to 1.0; and
(f) CURRENT RATIO. A ratio of current
assets to current liabilities on any date of at least 1.0 to 1.0 (for
purposes of this calculation, current assets will include an amount
equal to the Unused Availability)."
2.5 AMENDMENTS TO SCHEDULES AND EXHIBITS. The Credit Agreement is
hereby amended to replace SCHEDULES 1, 2, and 3 to the Credit Agreement with
SCHEDULES 1, 2, and 3 attached to this Amendment and to add as EXHIBIT D to the
Credit Agreement the Pledge Agreement attached to this Amendment as EXHIBIT D.
2.6 NAME CHANGES. Lenders acknowledge that some of Borrower's
Subsidiaries have changed their names and some have merged into other
Subsidiaries, and Borrower represents that the current Subsidiaries and their
correct names are set out in SCHEDULE 3 attached hereto.
ARTICLE 3 - BORROWING BASE DETERMINATION.
3.1 PERIODIC DETERMINATION OF BORROWING BASE. (a) Pursuant to SECTIONS
4.01 and 4.02 of the Credit Agreement and effective only upon satisfaction of
the conditions precedent set out in ARTICLE 4 below, Lenders who are signatory
parties to this Amendment (whose Commitment Percentages aggregate at least 75%,
resulting in approval of this Amendment by Required Lenders) and Borrower agree
that the Borrowing Base will remain at $385,000,000 (subject to the provisions
of SECTION 4.05 of the Credit Agreement as amended hereby) until June 30, 1999.
As of June 30, 1999, the Borrowing Base will be redetermined by the Required
Lenders. In accordance with the provisions of ARTICLE 4 of the Credit Agreement,
as amended hereby, if on June 30, 1999, the Outstanding Obligations equal or
exceed $300,000,000 or such higher Borrowing Base as may be determined by
Required Lenders as of such date, then on or before July
FOURTH AMENDMENT - Page 5
6
10, 1999, Borrower shall pay to Administrative Agent, for the ratable benefit of
Lenders, the amount by which the Outstanding Obligations exceed $300,000,000 or
the higher Borrowing Base then in effect. If the Borrowing Base determined by
Required Lenders as of June 30, 1999, is less than $300,000,000, then Borrower
shall be required to eliminate the deficiency between $300,000,000 and the
Borrowing Base then in effect in accordance with SECTION 4.06(a) of the Credit
Agreement. The Determination effective as of June 30, 1999, and all subsequent
Determinations of the Borrowing Base shall be made in accordance with the terms
of the Credit Agreement. Notwithstanding the provisions of SECTION 4.02 of the
Credit Agreement, the parties agree that there will be no Periodic Determination
made as of May 1, 1999.
(b) In consideration of the amendments and changes made
herein, Borrower agrees to pay to Administrative Agent, for the ratable benefit
of the Lenders and allocated in accordance with the Commitment Percentages shown
on SCHEDULE 1 to the Credit Agreement, a fee equal to $425,000.
ARTICLE 4 - CONDITIONS PRECEDENT.
4.1 CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Administrative Agent:
(a) CLOSING DELIVERIES. Administrative Agent shall have
received the following documents, instruments, agreements, and other
information, each of which shall be in form and substance and executed in such
counterparts as shall be acceptable to Administrative Agent and Required Lenders
and each of which shall, unless otherwise indicated, be dated the Effective
Date:
(i) this Amendment;
(ii) a Pledge Agreement duly executed by Borrower and
its Subsidiaries, as appropriate, together with (A) certificates evidencing (1)
100% of the issued and outstanding Capital Stock of Borrower's Subsidiaries (all
certificates delivered pursuant to this provision shall be duly endorsed or
accompanied by duly executed blank stock powers), and (B) accompanied by such
financing statements executed by Borrower as Administrative Agent shall request
to perfect the Liens granted pursuant to the Pledge Agreement;
(iii) a certificate executed by an Authorized Officer
of Borrower stating that (A) the representations and warranties of Borrower
contained in this
FOURTH AMENDMENT - Page 6
7
Amendment, the Credit Agreement, and the other Loan Documents are true and
correct in all respects, (B) no Default or Event of Default has occurred which
is continuing, and (C) all conditions set forth in this SECTION 4.1(a) and in
SECTION 6.02 of the Credit Agreement have been satisfied; and
(iv) such resolutions, certificates and other
documents relating to the existence of the Loan Parties, the corporate,
partnership, or limited liability company authority for the execution, delivery
and performance of this Amendment, the Credit Agreement, the other Loan
Documents, and certain other matters relevant hereto, in form and substance
satisfactory to Administrative Agent, which resolutions, certificates and
documents include resolutions of the directors of each Loan Party authorizing
the execution, delivery, and performance of the Loan Documents and certificates
of incumbency for each Loan Party.
(b) NO MATERIAL ADVERSE EFFECT. Other than the decline in
commodity prices, no event or condition shall have occurred which is reasonably
expected to have a Material Adverse Effect.
(c) NO LEGAL PROHIBITION. The transactions contemplated by
this Amendment shall be permitted by applicable law and regulation and shall not
subject Agents, any Lender, Borrower, or any Subsidiary to any material adverse
change in their assets, liabilities, financial condition, or prospects.
(d) NO LITIGATION. No litigation, arbitration, or similar
proceeding shall be pending or threatened against Borrower or any Subsidiary
which calls into question the validity or enforceability of the Credit Agreement
(as amended hereby) or the other Loan Documents.
(e) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing.
(f) OTHER MATTERS. All matters related to this Amendment, the
other Loan Documents, and Borrower and its Subsidiaries shall be acceptable to
Administrative Agent and each Lender in their discretion, and Borrower shall
have delivered to Administrative Agent and each Lender such evidence as they
shall request to substantiate any matters related to the Credit Agreement (as
amended hereby), the other Loan Documents and Borrower and its Subsidiaries as
Administrative Agent or any Lender shall request.
FOURTH AMENDMENT - Page 7
8
(g) CLOSING FEES. Borrower shall have paid to Agents and
Lenders the fee described in SECTION 3.1 above.
ARTICLE 5 - RATIFICATIONS, REPRESENTATIONS, AND COVENANTS.
5.1 RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Credit Agreement and the other Loan Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower and Lenders agree that the
Credit Agreement and the other Loan Documents, as amended hereby, shall continue
to be legal, valid, binding, and enforceable in accordance with their respective
terms.
5.2 REPRESENTATIONS AND COVENANTS. Borrower hereby represents and
warrants to Lenders that (a) the execution, delivery, and performance of this
Amendment and any and all other Loan Documents executed or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Articles of Incorporation or
Bylaws of Borrower; (b) the representations and warranties contained in the
Credit Agreement, as amended hereby, and any other Loan Documents are true and
correct on and as of the date hereof, as though made on and as of such date; (c)
no Default or Event of Default under the Credit Agreement, as amended hereby,
has occurred and is continuing; and (d) Borrower is in full compliance with all
covenants and agreements contained in the Credit Agreement and the other Loan
Documents, as amended hereby.
ARTICLE 6 - MISCELLANEOUS PROVISIONS.
6.1 NO WAIVER. Except as specifically provided in this Amendment,
nothing contained in this Amendment shall be construed as a waiver by Lenders of
any covenant or provision of the Credit Agreement, the other Loan Documents,
this Amendment, or of any other contract or instrument between Borrower and
Lenders, and the failure of Lenders at any time or times hereafter to require
strict performance by Borrower of any provision thereof shall not waive, affect,
or diminish any right of Lenders to thereafter demand strict compliance
therewith. Lenders hereby reserve all rights granted under the Credit Agreement,
the other Loan Documents, this Amendment, and any other contract or instrument
between Borrower and Lenders.
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Credit Agreement or any other Loan Documents,
including,
FOURTH AMENDMENT - Page 8
9
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agents or any Lender shall affect the
representations and warranties or the right of Agents or any Lender to rely upon
them.
6.3 REFERENCE TO CREDIT AGREEMENT. Each of the Credit Agreement and the
other Loan Documents, and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby
amended so that any reference in the Credit Agreement and such other Loan
Documents to the Credit Agreement shall mean a reference to the Credit Agreement
as amended hereby.
6.4 EXPENSES OF AGENT. As provided in the Credit Agreement, Borrower
agrees to pay on demand all reasonable costs and expenses incurred by
Administrative Agent in connection with the preparation, negotiation, and
execution of this Amendment and the other Loan Documents executed pursuant
hereto and any and all amendments, modifications, and supplements thereto,
including, without limitation, the costs and fees of Administrative Agent's
legal counsel, and all reasonable costs and expenses incurred by Lenders in
connection with the enforcements or preservation of any rights under the Credit
Agreement, as amended hereby, or any other Loan Documents, including, without
limitation, the reasonable costs and fees of Administrative Agent's legal
counsel.
6.5 SEVERABILITY. Any provisions of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provisions so held to be invalid or unenforceable.
6.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lenders and Borrower and their respective successors and
assigns, except that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lenders.
6.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
6.8 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Administrative Agent or any Lender to or for any breach of or deviation from any
covenant or condition by Borrower shall be deemed a consent to or waiver of any
other breach of the same or any other covenant, condition, or duty.
FOURTH AMENDMENT - Page 9
10
6.9 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.10 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS UNLESS THE LAWS GOVERNING NATIONAL BANKS SHALL HAVE APPLICATION.
6.11 FINAL AGREEMENT. THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE AGREEMENT OF THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS
EXECUTED. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY,
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE, OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDERS.
BORROWER:
RANGE RESOURCES CORPORATION
By:
--------------------------------------
Xxxxxx X. Xxxxxx,
Senior Vice President -
Finance and Administration
AGENTS:
BANK ONE, TEXAS, N.A.,
as Administrative Agent and a Lender
By:
--------------------------------------
W. Xxxx Xxxxxxx, Vice President
FOURTH AMENDMENT - Page 10
11
CHASE BANK OF TEXAS, N.A.,
as Syndication Agent and a Lender
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
NATIONSBANK, N.A.,
as Documentation Agent and a Lender
By:
--------------------------------
J. Xxxxx Xxxxxx, Vice President
BANKERS TRUST COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
OTHER LENDERS:
PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BANKBOSTON, N.A.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CIBC INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
FOURTH AMENDMENT - Page 11
12
XXXXX FARGO BANK (TEXAS), N.A.
By:
--------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ABN AMRO BANK N.V.
By: ABN AMRO North America, Inc.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BANK OF SCOTLAND
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
THE SANWA BANK, LIMITED
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
FOURTHAM.WPD [March 11, 1999]aa
FOURTH AMENDMENT - Page 12
