WAIVER AND FOURTH AMENDMENT
TO CREDIT AGREEMENT
BETWEEN
HARKEN EXPLORATION COMPANY, XPLOR ENERGY, INC.
HARKEN ENERGY WEST TEXAS, INC., SOUTH COAST EXPLORATION CO.,
XPLOR ENERGY SPV-1, INC.,
HARKEN GULF EXPLORATION COMPANY
AND
BANK ONE, NA,
AS AGENT AND LENDER
AND THE LENDERS SIGNATORY HERETO
Effective as of March 21, 2002
REDUCING REVOLVING LINE OF CREDIT OF UP TO $100,000,000
TABLE OF CONTENTS
PAGE
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 WAIVERS.............................................2
2.01 Waivers.............................................2
2.02 Limitation on Waivers...............................2
ARTICLE III AMENDMENTS..........................................2
3.01 Amendment of Section 2.9(a).........................2
3.02 Addition of Section 6.13............................2
3.03 Deletion of Section 6.16............................3
3.04 Amendment of Section 6.19...........................3
3.05 Amendment of Exhibit I..............................3
ARTICLE IV CONDITIONS..........................................3
4.01 Receipt of Documents................................3
4.02 Accuracy of Representations and Warranties..........3
4.03 Matters Satisfactory to Lenders.....................3
ARTICLE V REPRESENTATIONS AND WARRANTIES......................3
ARTICLE VI RATIFICATION........................................3
ARTICLE VII MISCELLANEOUS.......................................4
7.01 Scope of Amendment..................................4
7.02 Agreement as Amended................................4
7.03 Parties in Interest.................................4
7.04 Rights of Third Parties.............................4
7.05 ENTIRE AGREEMENT....................................4
7.06 GOVERNING LAW.......................................4
7.07 JURISDICTION AND VENUE..............................4
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EXHIBIT I
[FORM OF NOTE]
PROMISSORY NOTE
$100,000,000 Houston, Texas March 21, 2002
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("Maker") promises to
pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION ("Payee"), at its
banking quarters in Houston, Xxxxxx County, Texas, the sum of ONE HUNDRED
MILLION DOLLARS ($100,000,000), or so much thereof as may be advanced against
this Note pursuant to the Credit Agreement dated of even date herewith by and
between Maker and Payee (as amended, restated, or supplemented from time to
time, the "Credit Agreement"), together with interest at the rates and
calculated as provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitle the
holder hereof to accelerate the maturity of all amounts due hereunder.
Capitalized terms used but not defined in this Note shall have the meanings
assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is one of the "Notes" under, and is
payable as provided in the Credit Agreement. Subject to compliance with
applicable provisions of the Credit Agreement, Maker may at any time pay the
full amount or any part of this Note without the payment of any premium or fee,
but such payment shall not, until this Note is fully paid and satisfied, excuse
the payment as it becomes due of any payment on this Note provided for in the
Credit Agreement.
Without being limited thereto or thereby, this Note is secured by the
Security Instruments.
This Note is issued, in whole or in part, in renewal and extension, but not
in novation or discharge, of the remaining principal balance of the Existing
Note.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW;
PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL
NOT APPLY TO THIS NOTE.
[Page One of Two Page Note]
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BORROWER:
HARKEN EXPLORATION COMPANY
XPLOR ENERGY, INC.
HARKEN ENERGY WEST TEXAS, INC.
SOUTH COAST EXPLORATION CO.
XPLOR ENERGY SPV-1, INC.
By:
----------------------------------------------
Xxxx Xxxxxxxx
Senior Vice President and Chief
Financial Officer
[Page Two of Two Page Note]
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WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
This WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth
Amendment") is made and entered into effective as of March 21, 2002, between
HARKEN EXPLORATION COMPANY, a Delaware corporation, XPLOR ENERGY, INC., a Texas
corporation, HARKEN ENERGY WEST TEXAS, INC., a Delaware corporation, XPLOR
ENERGY SPV-1, INC., an Oklahoma corporation, and HARKEN GULF EXPLORATION
COMPANY, a Delaware corporation (collectively the "Borrower"), each lender that
is signatory hereto or becomes a signatory hereto as provided in Section 9.1,
(individually, together with its successors and assigns, a "Lender", and
collectively together with their respective successors and assigns, the
"Lenders"), and BANK ONE, NA, a national banking association, as agent for the
Lenders (in such capacity, together with its successors in such capacity
pursuant to the terms hereof, the "Agent") (as successor by merger to Bank One,
Texas, National Association).
W I T N E S S E T H
WHEREAS, the above named parties did execute and exchange counterparts of
that certain Credit Agreement dated August 11, 2000, as amended by First
Amendment to Credit Agreement dated December 21, 2000, as further amended by
Second Amendment to Credit Agreement dated December 31, 2000, and as further
amended by Third Amendment to Credit Agreement dated May 11, 2001 (the
"Agreement"), to which reference is here made for all purposes;
WHEREAS, XxXxxxxxx Energy, Inc. is hereby released from the Agreement;
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 this Fourth Amendment, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms "Agent,"
"Agreement," "Borrower," "Fourth Amendment," "Lender," and "Lenders" 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 Fourth Amendment to Article or Section
numbers shall be to Articles and Sections of this Fourth Amendment, unless
expressly stated herein to the contrary. References in this Fourth Amendment to
"hereby," "herein," hereinafter," hereinabove," "hereinbelow," "hereof," and
"hereunder" shall be to this Fourth Amendment in its entirety and not only to
the particular Article or Section in which such reference appears.
1
1.04 Articles and Sections. This Fourth 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 Fourth 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
WAIVERS
2.01 Waivers. In consideration of the Borrower entering into a commodity
hedge agreement, the Lenders hereby waive any Default or Event of Default
arising under the Agreement or any other Loan Document solely as a result of
violations of Section 6.19 for the quarter ending December 31, 2001, and
projected noncompliance for the quarter ending March 31, 2002, and Guarantors
violations of Section 6.16 for the quarter ending December 31, 2001.
2.02 Limitation on Waivers. The scope of the waivers set forth in Section
2.1 are expressly limited to their terms and do not extend to any other or
future breaches, Defaults, violations or Events of Default under the Agreement
or any other Loan Document.
ARTICLE III
AMENDMENTS
The Borrower and the Lenders hereby amend the Agreement in the following
particulars:
3.01 Amendment of Section 2.9(a). Section 2.9(a) of the Agreement is hereby
amended as follows:
"2.9 Borrowing Base Determinations. (a) The Borrowing Base is acknowledged
by the Borrower and the Lenders to be $7,937,000. Borrowing Base reductions
are eliminated until the next Borrowing Base redetermination. In the event
the Borrowing Base review is not completed by June 1, 2002, the Borrowing
Base shall be reduced on June 1, 2002, by $300,000 and on the first day of
each month thereafter until the Borrowing Base and the amount of monthly
reduction has been redetermined."
3.02 Addition of Section 6.13. Section 6.13 is hereby added to the
Agreement to read as follows:
"6.13 Current Ratio. Guarantor shall not permit its ratio of Current Assets
to Current Liabilities to be less than 1.15 to 1.00 at any time."
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3.03 Deletion of Section 6.16. Section 6.16 is hereby deleted from the
Agreement.
3.04 Amendment of Section 6.19. Section 6.19 of the Agreement is hereby
amended as follows:
"6.19 Debt Service Coverage Ratio of the Borrower. Permit, as of the close
of any fiscal quarter, the ratio of (a) EBITDA for any fiscal quarter to
(b) Debt Service for such quarter to be less than 1.15 to 1.00."
3.05 Amendment of Exhibit I. Exhibit I, i.e. the Form of Promissory Note,
is as set forth on Exhibit I to this Fourth Amendment.
ARTICLE IV
CONDITIONS
The obligation of the Lenders to amend the Agreement as provided herein is
subject to the fulfillment of the following conditions precedent:
4.01 Receipt of Documents. The Lenders shall have received, reviewed, and
approved the following documents and other items, appropriately executed when
necessary and in form and substance satisfactory to the Agent:
(a) multiple counterparts of this Fourth Amendment, as requested by the
Agent; and
(b) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Agent may
reasonably request.
4.02 Accuracy of Representations and Warranties. The representations and
warranties contained in Article IV of the Agreement and this Fourth Amendment
shall be true and correct.
4.03 Matters Satisfactory to Lenders. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lenders, 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 VI
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 Fourth Amendment.
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ARTICLE VII
MISCELLANEOUS
7.01 Scope of Amendment. The scope of this Fourth Amendment is expressly
limited to the matters addressed herein and this Fourth 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 Fourth Amendment.
7.02 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 Fourth Amendment.
7.03 Parties in Interest. All provisions of this Fourth Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Agent and the
Lenders and their respective successors and assigns.
7.04 Rights of Third Parties. All provisions herein are imposed solely and
exclusively for the benefit of the Agent, Lenders 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 Lenders at any time if in their sole
discretion it deems it advisable to do so.
7.05 ENTIRE AGREEMENT. THIS FOURTH AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS FOURTH 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.
7.06 GOVERNING LAW. THIS FOURTH 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.
7.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS FOURTH AMENDMENT, THE AGREEMENT OR
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ANY OTHER LOAN DOCUMENT MAY BE LITIGATED IN COURTS HAVING SITUS IN XXXXXX
COUNTY, TEXAS. EACH OF THE BORROWER AND THE LENDERS HEREBY SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN XXXXXX 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 LENDERS IN ACCORDANCE WITH THIS SECTION.
IN WITNESS WHEREOF, this Fourth Amendment to Credit Agreement is executed
effective the date first hereinabove written.
BORROWER
HARKEN EXPLORATION COMPANY
XPLOR ENERGY, INC.
HARKEN ENERGY WEST TEXAS, INC.
SOUTH COAST EXPLORATION CO.
XPLOR ENERGY SPV-1, INC.
HARKEN GULF EXPLORATION COMPANY
By:
-----------------------------------------
Xxxx Xxxxxxxx
Senior Vice President and Chief Financial
Officer
GUARANTOR
HARKEN ENERGY CORPORATION
By:
------------------------------------------
Xxxx Xxxxxxxx
Senior Vice President and Chief Financial
Officer
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AGENT AND LENDER
BANK ONE, NA (Main Office Chicago)
By:
------------------------------------------
Xxxxxxxx Xxxxxxx
Vice President
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