FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made as of the 15th day of March, 1997, by and among DEVON
ENERGY CORPORATION (NEVADA), as Borrower ("Borrower"), DEVON
ENERGY CORPORATION ("Parent"), as guarantor, NATIONSBANK OF
TEXAS, N.A., as Agent ("Agent"), and NATIONSBANK OF TEXAS, N.A.,
BANK ONE, TEXAS, N.A., BANK OF MONTREAL and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, as Lenders ("Lenders").
WHEREAS, Borrower, Parent, Devon Energy Operating
Corporation ("DEOC"), Agent and Lenders have entered into that
certain Credit Agreement dated as of August 30, 1996 (the
"Original Agreement"); and
WHEREAS, DEOC and Avon Energy Corporation have been
liquidated; and
WHEREAS, Parent has guaranteed to Agent and Lenders the
payment of the Notes and of all other sums payable under the
Credit Agreement and the other Loan Documents pursuant to its
Guaranty; and
WHEREAS, Borrower, Parent, Agent and Lenders desire to amend
the Original Agreement as herein provided;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and in the
Original Agreement, in consideration of the loans which may
hereafter be made by Lenders to Borrower, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE I -- Definitions and References
1.1. Terms Defined in the Original Agreement. Unless the
context otherwise requires or unless otherwise expressly defined
herein, the terms defined in the Original Agreement shall have
the same meanings whenever used in this Amendment.
1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall
have the meanings assigned to them in this 1.2.
"Amendment" means this First Amendment to Credit Agreement.
"Credit Agreement" means the Original Agreement as amended
hereby.
ARTICLE II -- Amendments
2.1. Defined Terms. (a) Section 1.1 of the Original
Agreement is hereby amended by adding the definitions of
"Canadian Facility", "DBC" and "Devon Canada" to read as follows:
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"Canadian Facility" means an unsecured revolving credit
facility, between Devon Canada and Bank of Montreal, in an
aggregate amount not to exceed U.S. $50,000,000, and any
unsecured guaranty by Parent, Borrower and/or other
Guarantors, guaranteeing such facility.
"DBC" means DBC, Inc., an Oklahoma corporation.
"Devon Canada" means Devon Energy Canada Corporation, a
Canadian corporation organized under the laws of Alberta.
(b) Section 1.1 of the Original Agreement is hereby amended
by amending the definitions of "Commitment Period", "Guarantor"
and Maximum Loan Amount to read as follows:
"Commitment Period" means the period from and including
the date on which the Notes are delivered and accepted as
contemplated in Section 2.4 until and including August 31,
2003 (or any date on which the Notes otherwise become due
and payable in full as provided in the Loan Documents).
"Guarantor" means any Person who has guaranteed some or
all of the Obligations and who has been recognized in
writing by Agent as a Guarantor. Parent and DBC are each
hereby recognized as a Guarantor.
"Maximum Loan Amount" means, with respect to each
Lender, the amount set forth opposite its name on the
signature pages hereto, and "Maximum Loan Amounts" means the
sum of all such amounts; provided,
(a) on August 31, 2000, the Maximum Loan Amounts
shall be automatically ratably reduced to the Available
Borrowing Base which is in effect on such date; and
(b) on the last day of each November, February,
May and August, commencing November 30, 2000, the
Maximum Loan Amounts shall be further automatically
ratably reduced by the Quarterly Reduction Amount; and
(c) on August 31, 2003, the Maximum Loan Amounts
shall be automatically reduced to zero.
As used herein, "Quarterly Reduction Amount" shall mean an
amount equal to eight and one-third percent (8.33%) of the
Available Borrowing Base as of August 31, 2000.
(c) Section 1.1 of the Original Agreement is hereby amended
by deleting the definitions of "Avon" and "DEOC".
2.2. Facility Fees. The reference to "one quarter percent
(0.25%)" set forth in Section 2.8(a) of the Original Agreement is
hereby amended to refer instead to "one-fifth percent (0.2%)".
2.3. Restricted Debt - Operating Leases. Clause (ii) of
Section 5.2(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
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(ii) operating lease or capital lease obligations
(excluding oil, gas or mineral leases) entered into in the
ordinary course of the Restricted Persons' businesses in
arm's length transactions at competitive market rates under
competitive terms and conditions in all respects;
2.4. Restricted Debt - Canadian Facility and
Miscellaneous. Section 5.2(a) of the Original Agreement is
hereby amended as follows: clause (xi) is renumbered clause
(xii), a new clause (xi) is added, and renumbered clause (xii) is
amended in its entirety, all to read as follows:
(xi) the Canadian Facility; and
(xii) miscellaneous items of Restricted Debt not
described in subsections (i) through (xi) of this subsection
(a) which do not in the aggregate (taking into account all
such Restricted Debt of all Restricted Persons) exceed
$10,000,000 at any one time outstanding; provided, that
after giving effect to such Restricted Debt outstanding from
time to time, Borrower is not in violation of Sections
5.2(j) and (k).
2.5. Limitation on Intercompany Transfers. The
parenthetical in the first clause of clause (ii) of Section
5.2(c) of the Original Agreement is hereby amended in its
entirety to read as follows:
(other than Borrower, Guarantors, Devon Trust and Devon
Canada)
2.6. Limitation on Intercompany Transfers. Clauses (iii)
through (v) of Section 5.2(c) of the Original Agreement are
hereby renumbered (iv) through (vi), and a new clause (iii) is
hereby added to read as follows:
(iii) Parent may make loans or capital
contributions to, purchase shares of common stock from, or
otherwise provide funds to Devon Canada, provided that (A)
the aggregate amount of all such loans, capital
contributions, purchases of shares, and other provisions of
funds to Devon Canada shall not exceed $25,000,000, and (B)
no Default exists immediately before or immediately after
such transaction;
2.7. Tangible Net Worth. Section 5.2(k)(i), (ii) and
(iii) of the Original Agreement is hereby amended in its entirety
to read as follows:
(k) Tangible Net Worth. Parent's Consolidated
Tangible Net Worth will never be less than:
(i) $551,000,000, plus
(ii) one hundred percent (100%) of the proceeds
(net only of costs of sale) from any issuance after
January 1, 1997 of any shares of Parent's common or
preferred stock or any other securities, other than the
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Subordinated Parent Debentures (including any options,
warrants or other rights to acquire such stock) which
Parent issues after such date, provided that Parent
shall comply with the provisions of Section 5.2(e)
hereof in connection with any such issuance.
2.8. Subsidiary Guaranties. The parenthetical contained
in the first sentence of Section 6.2 of the Original Agreement is
hereby amended in its entirety to read as follows:
(other than Borrower, Parent, the other Guarantors, Devon
Trust or Devon Canada)
2.9. Designation of Borrowing Base. Pursuant to Section
2.13 of the Credit Agreement, Agent, with the concurrence of
Evaluating Lenders, hereby designates the new Borrowing Base as
$200,000,000, effective for the period beginning on the date
hereof, a Determination Date, and continuing until but not
including the next date as of which the Borrowing Base is
redetermined.
2.10. Exhibits. Exhibit A to the Original Agreement is
hereby amended in its entirety to read as set forth in Exhibit A
attached hereto.
2.11. DEOC and Avon. Agent and Lenders hereby acknowledge
that DEOC and Avon have been liquidated. All references to DEOC
or Avon in any Loan Document are hereby deleted.
ARTICLE III. -- Conditions of Effectiveness
3.1. Effective Date. This Amendment shall become
effective as of the date first above written when, and only when,
(i) Agent shall have received, at Agent's office, a counterpart
of this Amendment executed and delivered by Borrower and each
Lender, (ii) Borrower shall have issued and delivered to Agent,
for subsequent delivery to each Lender, a Note with appropriate
insertions in the form attached hereto as Exhibit A payable to
the order of such Lender on or before August 31, 2003, duly
executed on behalf of Borrower, dated the date hereof, and in a
principal amount equal to the stated principal amount of the Note
heretofore delivered to such Lender under the Original Agreement,
and (iii) Agent shall have additionally received all of the
following documents, each document (unless otherwise indicated)
being dated the date of receipt thereof by Agent, duly
authorized, executed and delivered, and in form and substance
satisfactory to Agent:
(a) Opinion of Counsel for Borrower. Agent shall have
received the written opinion of McAfee & ▇▇▇▇, P.C., dated
as of the date of this Amendment, addressed to Agent, in the
form of Exhibit B attached hereto.
(b) Officer's Certificate. Agent shall have received
a certificate of a duly authorized officer of Borrower and
Parent to the effect that all of the representations and
warranties set forth in Article IV hereof are true and
correct at and as of the time of such effectiveness.
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(c) Supporting Documents. Agent shall have received
(i) a certificate of the Secretary or Assistant Secretary of
Borrower and Parent dated the date of this Amendment
certifying that attached thereto is a true and complete copy
of resolutions adopted by the Board of Directors of Borrower
and Parent authorizing the execution, delivery and
performance of this Amendment and the Notes, certifying the
names and true signatures of the officers of Borrower and
Parent authorized to sign this Amendment and the Notes, and
certifying that the charter documents and bylaws of Borrower
and Parent attached to that certain Omnibus Certificate
dated August 30, 1996 are true, correct and complete as of
the date hereof, and (ii) such supporting documents as Agent
may reasonably request.
ARTICLE IV -- Miscellaneous
4.1. Ratification of Agreements. The Original Agreement
is hereby ratified and confirmed in all respects. Any reference
to the Credit Agreement in any Loan Document shall be deemed to
refer to the Original Agreement as amended hereby. Any reference
to the Notes in any other Loan Document shall be deemed to be a
reference to the Notes issued and delivered pursuant to this
Amendment. Parent hereby consents to the provisions of this
Amendment and the Notes and hereby ratifies and confirms its
Guaranty and agrees that its obligations and covenants thereunder
are unimpaired hereby and shall remain in full force and effect.
4.2. Representations. Each of Borrower and Parent
represent and warrant that the representations and warranties
contained in Section 4.1 and Section 9.1(b) of the Credit
Agreement are true and correct at and as of the date hereof
(taking into account the fact that this Amendment and the Notes
issued in connection herewith are each a Loan Document as
referred to in such Sections). Each of Borrower and Parent
represent and warrant that the resolutions of their respective
Boards of Directors, attached as Exhibits A and B to that certain
Omnibus Certificate dated as of August 30, 1996, given on behalf
of Borrower and Parent in connection with the Original Agreement,
remain in full force and effect on the date hereof.
4.3. Survival of Agreements. All representations,
warranties, covenants and agreements of Borrower or Parent herein
shall survive the execution and delivery of this Amendment and
the Notes issued in connection herewith and the performance
hereof and shall further survive until all of the Obligations are
paid in full.
4.4. Delivery of Prior Notes. Each Lender shall promptly
deliver to Agent, for subsequent delivery to Borrower, the Note
heretofore delivered to it under the Original Agreement.
4.5. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of Texas
and any applicable laws of the United States of America in all
respects, including construction, validity and performance.
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4.6. Counterparts. This Amendment may be separately
executed in counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to constitute one and the same Amendment. This Amendment
shall, when executed by each party hereto, take effect as of the
date first above written.
4.7. Loan Documents. This Amendment and each Note is a
Loan Document, and all provisions in the Credit Agreement
applying to Loan Documents (including, without limitation,
Section 9.1(b) thereof) apply hereto and thereto.
THIS WRITTEN 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, this Amendment is executed as of the
date first above written.
DEVON ENERGY CORPORATION (NEVADA)
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President -
Finance
DEVON ENERGY CORPORATION
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President -
Finance
NATIONSBANK OF TEXAS, N.A.
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
BANK ONE, TEXAS, N.A.
By:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Asst. Vice
President
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BANK OF MONTREAL
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
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CONSENT OF GUARANTOR
DBC, Inc. hereby consents to the foregoing Amendment and the
transactions contemplated therein and hereby ratifies and
confirms its obligations under its certain Guaranty dated as of
December 31, 1996 in favor of Agent, as agent for the Lenders.
This Consent is executed as of the date of the Amendment.
DBC, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President -
Finance
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