FIRST AMENDMENT OF CREDIT AGREEMENT
THIS FIRST AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated
as of August 12, 2004, is by and between INFINITY OIL & GAS OF WYOMING, INC., a
Wyoming corporation ("Borrower"), and U.S. BANK NATIONAL ASSOCIATION, a national
banking association ("USB").
RECITALS
A. Borrower and USB entered into a Credit Agreement dated as of
September 4, 2003 (the "Credit Agreement"), in order to set forth the terms upon
which USB would make advances to Borrower and issue letters of credit at the
request of Borrower and by which such advances and letters of credit would be
governed and repaid. Capitalized terms used herein but not defined herein shall
have the same meanings as set forth in the Credit Agreement.
B. Borrower and USB desire that this Amendment be executed and
delivered in order to amend certain terms and provisions of the Credit
Agreement.
AMENDMENT
NOW, THEREFORE, in consideration of $10.00 and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Credit Agreement. The Credit Agreement shall be, and hereby is,
amended as follows as of the date hereof:
(a) By inserting the following new definitions in alphabetical
order in Section 1.1 of the Credit Agreement:
"Commitment Amount (Ex-Duke)" means, at any time, the
lesser of: (a) the Maximum Loan Amount (Ex-Duke), or (b) the Borrowing
Base.
"Duke Letter of Credit" means a Letter of Credit dated
March 16, 2004, for the benefit of Duke Energy Field Services, in the
original face amount of $300,000, as now in effect or as hereafter
amended.
"Maximum Loan Amount (Ex-Duke)" means, at any time, the
Maximum Loan Amount at that time minus the face amount of the Duke Letter
of Credit at that time.
(b) By substituting the following for the definition of
"Borrowing Base" in Section 1.1 on page 2 of the Credit Agreement:
"Borrowing Base" means, at any time, the aggregate loan
value of all Borrowing Base Properties, as determined by USB in its sole
and absolute discretion, using such assumptions as to pricing, discount
factors, discount rates, expenses and other factors as USB customarily
uses as to borrowing-base oil and gas loans at the time such determination
is made; provided that the Borrowing Base for the time period from August
12, 2004 through December 31, 2004 shall be $5,300,000, unless Borrower
and USB hereafter mutually agree upon a different amount or unless the
Borrowing Base is redetermined or reduced pursuant to Section 2.8 below
prior to such date.
(c) By substituting the following for the definition of
"Maximum Loan Amount" in Section 1.1 on pages 5 and 6 of the Credit Agreement:
"Maximum Loan Amount" means, at any time, the amount set
forth for that time on Exhibit D attached hereto and made a part hereof;
provided that, upon the request of Borrower, USB may, in its sole
discretion, increase said amount to an amount not greater than $25,000,000
by giving written notice of such increase to Borrower, but nothing
contained in this Agreement, the Note or any other Loan Document shall be
deemed to commit or require USB to grant any such increase.
(d) By substituting the following for Section 2.1(c) on page 9
of the Credit Agreement:
(c) USB shall not have any obligation to: (1) make an
Advance on or after the Maturity Date, (2) issue or renew a Letter of
Credit which does not expire prior to five Business Days before the
Maturity Date, (3) make an Advance in an amount less than $10,000, (4)
make an Advance or issue a Letter of Credit if, after such Advance is made
or such Letter of Credit is issued, the aggregate amount of all Advances
outstanding hereunder plus the face amounts of all Letters of Credit
outstanding hereunder would exceed the Commitment Amount, or (5) make an
Advance or issue a Letter of Credit if, after such Advance is made or such
Letter of Credit is issued, the aggregate amount of all Advances
outstanding hereunder plus the face amounts of all Letters of Credit
outstanding hereunder, excluding the Duke Letter of Credit, would exceed
the Commitment Amount (Ex-Duke).
(e) By substituting the following for Section 2.3(a) on page
10 of the Credit Agreement:
(a)(1) If, at the time of any reduction in the
Commitment Amount arising from a reduction in the Maximum Loan Amount at
the beginning of any of the time periods described in Exhibit D, the
aggregate outstanding principal balance of all Advances plus the aggregate
of the face amounts of all outstanding Letters of credit shall exceed the
Commitment Amount or the aggregate outstanding principal balance of all
Advances plus the aggregate of the face amounts of all outstanding Letters
of Credit, excluding the Duke Letter of Credit, shall exceed the
commitment Amount (Ex-Duke), Borrower shall make a principal payment to
USB in the amount of any such excess on the day that such reduction occurs
(or, if such day is not a Business Day, on the first Business Day
thereafter).
(2) If, at the time of any reduction in the
Commitment Amount arising for any reason other than as described in
Section 2.3(a)(1) above, the aggregate outstanding principal balance of
all Advances plus the aggregate of the face amounts of all outstanding
Letters of Credit shall exceed the Commitment Amount or the aggregate
outstanding principal balance of all Advances plus the aggregate of the
face amounts of all outstanding Letters of Credit, excluding the Duke
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Letter of Credit, shall exceed the Commitment Amount (Ex-Duke), Borrower
shall, after written notice thereof from USB: (A) pay the excess to USB in
a lump sum within 10 days after such notice; or (B) commence, as of the
last day of the calendar month in which such notice is given (and
thereafter continue), an amortization schedule under which Borrower repays
the Loan in an amount at least equal to the excess in six equal monthly
principal installments on the last day of each calendar month, which
amounts shall be in addition to the monthly interest payments and any
other principal payments otherwise due, such that the entire excess is
paid within six months; or (C) within 10 days after such notice, execute
and deliver to USB additional mortgages, supplements to mortgages or other
instruments in form and substance reasonably satisfactory to USB, by which
Borrower mortgages, pledges or hypothecates to USB, or creates a security
interest in for the benefit of USB, sufficient additional Oil and Gas
Interests to induce USB to make a redetermination of the Borrowing Base
such that the Commitment Amount is equal to an amount no less than the
aggregate outstanding principal balance of all Advances plus the sum of
the face amounts of all outstanding Letters of Credit and the Commitment
Amount (Ex-Duke) is equal to an amount no less than the aggregate
outstanding principal balance of all Advances plus the sum of the face
amounts of all outstanding Letters of Credit, excluding the Duke Letter of
Credit.
(f) By adding Exhibit D attached hereto as Exhibit D attached
to the Credit Agreement.
2. Waiver. USB hereby waives Borrower's noncompliance, for times
prior to September 30, 2004, with Section 6.2(a)(l) of the Credit Agreement
relating to minimum Working Capital.
3. Loan Documents. All references in any document to the Credit
Agreement shall be deemed to refer to the Credit Agreement, as amended pursuant
to this Amendment.
4. Conditions Precedent. The obligations of the parties under this
Amendment are subject, at the option of USB, to the prior satisfaction of the
condition that Borrower shall have delivered to USB the following (all documents
to be satisfactory in form and substance to USB and, if appropriate, duly
executed and/or acknowledged on behalf of the parties other than USB):
(a) This Amendment.
(b) The loan fee payable by Borrower pursuant to Section
3.4(d) of the Credit Agreement at the time of the July 1, 2004
redetermination of the Borrowing Base.
5. Certification by Borrower. Borrower hereby certifies to USB that
as of the date of this Amendment and after giving effect to the waiver set forth
in Section 2 above: (a) all of Borrower's representations and warranties
contained in the Credit Agreement are true, accurate and complete in all
material respects, (b) Borrower has performed and complied with all agreements
and conditions required to be performed or complied with by it under the Credit
Agreement and/or any Loan Document on or prior to this date, and (c) no Default
or Event of Default has occurred under the Credit Agreement.
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6. Continuation of the Credit Agreement. Except as specified in this
Amendment, the provisions of the Credit Agreement shall remain in full force and
effect, and if there is a conflict between the terms of this Amendment and those
of the Credit Agreement, the terms of this Amendment shall control.
7. Expenses. Borrower shall pay all expenses incurred in connection
with the transactions contemplated by this Amendment, including without
limitation all fees and expenses of the attorney for USB and any and all filing
and recording expenses.
8. Miscellaneous. This Amendment shall be governed by and construed
under the laws of the State of Colorado and shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns. This
Amendment may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
EXECUTED as of the date first above written.
INFINITY OIL & GAS OF WYOMING, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx,
President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx,
Vice President
THE UNDERSIGNED, AS GUARANTOR,
CONSENTS TO THE PROVISIONS OF
THE FOREGOING FIRST AMENDMENT
OF CREDIT AGREEMENT:
INFINITY, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------
Xxxxxxx X. Xxxx
President
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EXHIBIT D
MAXIMUM LOAN AMOUNT
MAXIMUM
TIME PERIOD LOAN AMOUNT
----------- -----------
08/12/04 - 12/31/04 $5,300,000
01/01/05 - 01/31/05 $4,980,000
02/01/05 - 02/28/05 $4,660,000
03/01/05 - 03/31/05 $4,340,000
04/01/05 - 04/30/05 $4,080,000
05/01/05 - 05/31/05 $3,820,000
06/01/05 - 06/30/05 $3,560,000
07/01/05 - 07/31/05 $3,340,000
08/01/05 - 08/31/05 $3,120,000
09/01/05 - 09/30/05 $2,900,000
10/01/05 - 10/31/05 $2,720,000
11/01/05 - 11/30/05 $2,540,000
12/01/05 - 12/31/05 $2,360,000
01/01/06 - 01/31/06 $2,210,000
02/01/06 - 02/28/06 $2,060,000
03/01/06 - 03/31/06 $1,910,000
04/01/06 - 04/30/06 $1,780,000
05/01/06 - 05/31/06 $1,650,000
06/01/06 - 06/29/06 $1,520,000
06/30/06 and thereafter $0
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