AMENDMENT NO. 1 AND AGREEMENT
Exhibit 10.25
AMENDMENT NO. 1 AND AGREEMENT
This AMENDMENT NO. 1 AND AGREEMENT (the “Amendment”) dated as of March 19, 2009 (the
“Effective Date”) is among Xxxxxx Petroleum Company, a Delaware corporation
(“Borrower”), the Lenders (as defined below), and Union Bank of California, N.A., as
Administrative Agent and as Issuing Lender (as each such terms are defined below).
RECITALS
A. The Borrower is party to that certain Second Amended and Restated Credit Agreement dated as
of September 25, 2008 (as amended, modified or supplemented from time to time, the “Credit
Agreement”) among the Borrower, the lenders party thereto from time to time (the
“Lenders”), and Union Bank of California, N.A., as administrative agent (in such capacity,
the “Administrative Agent”) and as issuing lender (in such capacity, the “Issuing
Lender”).
B. The Borrower, the Lenders, the Issuing Lender and the Administrative Agent wish to, subject
to the terms and conditions of this Amendment, make certain amendments to the Credit Agreement as
provided herein.
THEREFORE, the Borrower, the Lenders, the Administrative Agent and the Issuing Lender hereby
agree as follows:
Section 1. Defined Terms. As used in this Amendment, each of the terms defined in the
opening paragraph and the Recitals above shall have the meanings assigned to such terms therein.
Each term defined in the Credit Agreement and used herein without definition shall have the meaning
assigned to such term in the Credit Agreement, unless expressly provided to the contrary.
Section 2. Other Definitional Provisions. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this Amendment, unless
otherwise specified. All references to instruments, documents, contracts, and agreements are
references to such instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise specified. The words
“hereof”, “herein”, and “hereunder” and words of similar import when used in this Amendment shall
refer to this Amendment as a whole and not to any particular provision of this Amendment. The term
“including” means “including, without limitation,”. Paragraph headings have been inserted in this
Amendment as a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Amendment and shall not be used in the interpretation of any
provision of this Amendment.
Section 3. Amendments to Credit Agreement.
(a) Section 1.01 (Defined Terms). Section 1.01 of the Credit Agreement is hereby
amended by adding the following new terms in alphabetical order:
"Amendment No. 1 Effective Date” means March 19, 2009.
"Monthly Borrowing Base Reduction Amount” has the meaning specified in Section
2.02(e).
(b) Section 2.02 (Borrowing Base). Section 2.02 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
Section 2.02 Borrowing Bases.
(a) Borrowing Bases. The Borrowing Base in effect as of the Amendment
No. 1 Effective Date has been set by the Administrative Agent and the Lenders and
acknowledged by the Borrower as $48,000,000; the Conforming Borrowing Base in effect
as of the date of the Amendment No. 1 Effective Date has been set by the
Administrative Agent and the Lenders and acknowledged by the Borrower as
$48,000,000; the Monthly Borrowing Base Reduction Amount in effect as of the
Amendment No. 1 Effective Date has been set by the Administrative Agent and the
Lenders and acknowledged by the Borrower as $4,330,000. Such Borrowing Base and
Conforming Borrowing Base shall remain in effect until each is reduced pursuant to
Section 2.02(e). The Borrowing Base, the Conforming Borrowing Base and the Monthly
Borrowing Base Reduction Amount shall each be determined in accordance with the
standards set forth in Section 2.02(d) and are subject to periodic redetermination
pursuant to Sections 2.02(b) and 2.02(c).
(b) Calculation of the Borrowing Base, the Conforming
Borrowing Base and the Monthly Borrowing Base Reduction Amount.
(i) The Borrower shall deliver to the Administrative Agent and each of
the Lenders on or before each March 31, beginning March 31, 2010, an
Independent Engineering Report dated effective as of the immediately
preceding January 1, and such other information as may be reasonably
requested by any Lender with respect to the Borrowing Base Properties
included or to be included in the Borrowing Base and the Conforming
Borrowing Base. Upon receipt of such information, the Administrative Agent
shall, in the normal course of business (but in any event within 30 days
after receipt of such information), propose to the Lenders a new (A)
Borrowing Base (for purposes of this subsection, the “Proposed Borrowing
Base”), (B) Conforming Borrowing Base (for purposes of this subsection, the
“Proposed Conforming Borrowing Base”) and (C) Monthly Borrowing Base
Reduction Amount (for purposes of this subsection, the “Proposed Monthly
Borrowing Base Reduction Amount”). After having received notice of such
proposal, the Lenders shall have 14 days to agree or disagree with the
Proposed Borrowing Base, the Proposed Conforming Borrowing Base and the
Proposed Monthly Borrowing Base Reduction Amount. If at the end of the 14
days, any Lender has not communicated its approval or disapproval to the
Administrative Agent, such silence shall be deemed to be an approval of the
Proposed Borrowing Base, the Proposed Conforming Borrowing Base and the
Proposed Monthly Borrowing Base Reduction Amount. If at the end of such 14
days, the Required Lenders (or all of the Lenders if (A) the
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Borrowing Base and/or the Conforming Borrowing Base is to be increased
or (B) the Proposed Monthly Borrowing Base Reduction Amount is to be
decreased) have approved or have been deemed to have approved the Proposed
Borrowing Base, the Proposed Conforming Borrowing Base and the Proposed
Monthly Borrowing Base Reduction Amount, then the Proposed Borrowing Base,
the Proposed Conforming Borrowing Base and the Proposed Monthly Borrowing
Base Reduction Amount shall become the new Borrowing Base, Conforming
Borrowing Base and Monthly Borrowing Base Reduction Amount, effective on the
date specified in Section 2.02(b)(iii). To the extent that within such 14
day period the Administrative Agent has not received the requisite number of
approvals from the Lenders, the requisite number of Lenders shall, within a
reasonable period of time, agree on a new Borrowing Base, Conforming
Borrowing Base and Monthly Borrowing Base Reduction Amount. Notwithstanding
anything herein to the contrary, if no Conforming Borrowing Base is
determined pursuant to this Section 2.02, the Borrowing Base as determined
pursuant to this Section 2.02 shall also be the Conforming Borrowing Base.
(ii) The Borrower shall deliver to the Administrative Agent and each
Lender on or before (x) each June 30, beginning June 30, 2009, an Internal
Engineering Report dated effective as of the immediately preceding April 1,
(y) each September 30, beginning September 30, 2009, an Internal Engineering
Report dated effective as of the immediately preceding July 1, and (z) each
December 31, beginning December 31, 2009, an Internal Engineering Report
dated effective as of the immediately preceding October 1, and, in each
case, such other information as may be reasonably requested by the
Administrative Agent with respect to the Borrowing Base Properties included
or to be included in the Borrowing Base and the Conforming Borrowing Base.
Upon receipt of such information, the Administrative Agent shall, in the
normal course of business (but in any event within 30 days after receipt of
such information), propose to the Lenders a new (A) Borrowing Base (for
purposes of this subsection, the “Proposed Borrowing Base”), (B) Conforming
Borrowing Base (for purposes of this subsection, the “Proposed Conforming
Borrowing Base”), and (C) Monthly Borrowing Base Reduction Amount (for
purposes of this subsection, the “Proposed Monthly Borrowing Base Reduction
Amount”). After having received notice of such proposal, the Lenders shall
have 14 days to agree or disagree with the Proposed Borrowing Base, the
Proposed Conforming Borrowing Base and the Proposed Monthly Borrowing Base
Reduction Amount. If at the end of the 14 days, any Lender has not
communicated its approval or disapproval to the Administrative Agent, such
silence shall be deemed to be an approval of the Proposed Borrowing Base,
the Proposed Conforming Borrowing Base and the Proposed Monthly Borrowing
Base Reduction Amount. If at the end of such 14 days, the Required Lenders
(or all of the Lenders if (A) the Borrowing Base and/or the Conforming
Borrowing Base is to be increased or (B) the Proposed Monthly Borrowing
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Base Reduction Amount is to be decreased) have approved or have been
deemed to have approved the Proposed Borrowing Base, the Proposed Conforming
Borrowing Base and the Proposed Monthly Borrowing Base Reduction Amount,
then the Proposed Borrowing Base, the Proposed Conforming Borrowing Base and
the Proposed Monthly Borrowing Base Reduction Amount shall become the new
Borrowing Base, Conforming Borrowing Base and Monthly Borrowing Base
Reduction Amount, effective on the date specified in Section 2.02(b)(iii).
To the extent that within such 14 day period the Administrative Agent has
not received the requisite number of approvals from the Lenders, the
requisite number of Lenders shall, within a reasonable period of time, agree
on a new Borrowing Base, Conforming Borrowing Base and Monthly Borrowing
Base Reduction Amount. Notwithstanding anything herein to the contrary, if
no Conforming Borrowing Base is determined pursuant to this Section 2.02,
the Borrowing Base as determined pursuant to this Section 2.02 shall also be
the Conforming Borrowing Base.
(iii) After a redetermined Borrowing Base, Conforming Borrowing Base
and Monthly Borrowing Base Reduction Amount is approved or deemed approved
by the Required Lenders or all of the Lenders, as applicable, the
Administrative Agent shall notify the Borrower of the amount of the
redetermined Borrowing Base, Conforming Borrowing Base and Monthly Borrowing
Base Reduction Amount, and such amounts shall become the Borrowing Base, the
Conforming Borrowing Base and the Monthly Borrowing Base Reduction Amount,
effective and applicable to the Borrower and, subject to the other
provisions of this Agreement, shall be the basis on which the Borrowing
Base, the Conforming Borrowing Base and the Monthly Borrowing Base Reduction
Amount shall thereafter be calculated until (a) with respect to the
Borrowing Base and the Conforming Borrowing Base, each is reduced pursuant
to Section 2.02(e) or redetermined in accordance with the other provisions
of this Section 2.02, and (b) with respect to the Monthly Borrowing Base
Reduction Amount, the effective date of the next redetermination of the
Monthly Borrowing Base Reduction Amount as set forth in this Section 2.02.
(iv) In the event that the Borrower does not furnish to the
Administrative Agent and the Lenders the Independent Engineering Report,
Internal Engineering Report or other information specified in clauses (i)
and (ii) above by the date specified therein, the Administrative Agent and
the Lenders may nonetheless redetermine the Borrowing Base, the Conforming
Borrowing Base, and the Monthly Borrowing Base Reduction Amount and
redesignate the Borrowing Base, the Conforming Borrowing Base and the
Monthly Borrowing Base Reduction Amount from time-to-time thereafter in
their sole discretion until the Administrative Agent and the Lenders receive
the relevant Independent Engineering Report, Internal Engineering Report, or
other information, as applicable, whereupon the Administrative Agent and the
Lenders shall redetermine the Borrowing Base, the Conforming
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Borrowing Base and the Monthly Borrowing Base Reduction Amount as otherwise
specified in this Section 2.02.
(v) Each delivery of an Engineering Report by the Borrower to the
Administrative Agent and the Lenders shall constitute a representation and
warranty by the Borrower to the Administrative Agent and the Lenders that,
except as expressly disclosed by the Borrower to the Administrative Agent
and the Lenders pursuant to Section 5.06 or otherwise, (A) the Borrower and
the Guarantors, as applicable, own the Borrowing Base Properties specified
therein with at least 80% (by value) of the Proven Reserves covered therein
subject to an Acceptable Security Interest and free and clear of any Liens
(except Permitted Liens), and (B) on and as of the date of such Engineering
Report each Borrowing Base Property described as “proved developed” therein
was developed for oil and gas, and the xxxxx pertaining to such Borrowing
Base Properties that are described therein as producing xxxxx (“Xxxxx”),
were each producing oil and gas in paying quantities, except for Xxxxx that
were utilized as water or gas injection xxxxx or as water disposal xxxxx or
xxxxx temporarily shut-in for workovers or other repairs in the ordinary
course of business.
(c) Interim Redetermination. In addition to the Borrowing Base
redeterminations provided for in Section 2.02(b), the Administrative Agent and the
Lenders may (i) in their sole discretion make one additional redetermination of the
Borrowing Base, the Conforming Borrowing Base and the Monthly Borrowing Base
Reduction Amount during any six-calendar month period and (ii) at the request of the
Borrower make one additional redetermination of the Borrowing Base, the Conforming
Borrowing Base and the Monthly Borrowing Base Reduction Amount during any
six-calendar month period, and in any case, based on such information as the
Administrative Agent and the Lenders deem relevant (but in accordance with Section
2.02(d)). Additionally, the Administrative Agent and the Lenders may request an
additional redetermination in connection with any sale or proposed sale of Borrowing
Base Properties of the Borrower or any Guarantor having a market value of $5,000,000
or more to the extent any such sale is permitted by this Agreement. The party
requesting the redetermination shall give the other party at least 10 days’ prior
written notice that a redetermination of the Borrowing Base, the Conforming
Borrowing Base and the Monthly Borrowing Base Reduction Amount pursuant to this
paragraph (c) is to be performed. In connection with any redetermination of the
Borrowing Base, the Conforming Borrowing Base and the Monthly Borrowing Base
Reduction Amount under this Section 2.02(c), the Borrower shall provide the
Administrative Agent and the Lenders with such information regarding the Borrower
and the Guarantors’ business (including its Borrowing Base Properties, the Proven
Reserves attributable thereto, and production relating thereto) as the
Administrative Agent may request, including an updated Independent Engineering
Report. The Administrative Agent shall promptly notify the Borrower in writing of
each redetermination of the Borrowing Base, the Conforming Borrowing Base and the
Monthly Borrowing Base Reduction Amount pursuant to this Section
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2.02(c) and the amount of the Borrowing Base, the Conforming Borrowing Base and
the Monthly Borrowing Base Reduction Amount as so redetermined.
(d) Standards for Redetermination. Each redetermination of the
Borrowing Base, the Conforming Borrowing Base and the Monthly Borrowing Base
Reduction Amount by the Administrative Agent and the Lenders pursuant to this
Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent
and the Lenders (but in accordance with the other provisions of this Section
2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’
customary internal standards and practices for valuing and redetermining the value
of Oil and Gas Properties in connection with reserve based oil and gas loan
transactions, (iii) in conjunction with the most recent Independent Engineering
Report or Internal Engineering Report, as applicable, or other information received
by the Administrative Agent and the Lenders relating to the Proven Reserves of the
Borrower and the Guarantors, and (iv) based upon the estimated value of the Proven
Reserves owned by the Borrower and the Guarantors as determined by the
Administrative Agent and the Lenders. In valuing and redetermining the Borrowing
Base, the Conforming Borrowing Base and the Monthly Borrowing Base Reduction Amount,
the Administrative Agent and the Lenders may also consider the business, financial
condition, and Debt obligations of the Borrower and its Subsidiaries and such other
factors as the Administrative Agent and the Lenders customarily deem appropriate,
including without limitation, commodity price assumptions, projections of
production, operating expenses, general and administrative expenses, capital costs,
working capital requirements, liquidity evaluations, dividend payments,
environmental costs, and legal costs. In that regard, the Borrower acknowledges
that the determination of the Borrowing Base and the Conforming Borrowing Base each
contains an equity cushion (market value in excess of loan value), which is
essential for the adequate protection of the Administrative Agent and the Lenders.
No Proven Reserves shall be included or considered for inclusion in either the
Borrowing Base or the Conforming Borrowing Base unless the Administrative Agent and
the Lenders shall have received, at the Borrower’s expense, evidence of title
satisfactory in form and substance to the Administrative Agent and evidence
satisfactory to the Administrative Agent that the Administrative Agent has an
Acceptable Security Interest in the Borrowing Base Properties relating thereto
pursuant to the Security Instruments and subject to Section 5.10 of this Agreement.
At all times after the Administrative Agent has given the Borrower notification of a
redetermination of the Borrowing Base and the Conforming Borrowing Base under this
Section 2.02, the Borrowing Base and the Conforming Borrowing Base shall be equal to
the redetermined amount or such lesser amount designated by the Borrower and
disclosed in writing to the Administrative Agent and the Lenders until the Borrowing
Base and the Conforming Borrowing Base are reduced pursuant to Section 2.02(e).
(e) Monthly Borrowing Base Reduction Amount. The Borrowing Base and the
Conforming Borrowing Base shall each be reduced as of the first day of each calendar month
by an amount determined by the Lenders pursuant to this Section 2.02 (the “Monthly
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Borrowing Base Reduction Amount”) as the Monthly Borrowing Base Reduction Amount;
provided that the first such reduction shall not occur until June 1, 2009.
(c) Section 5.06 (Reporting Requirements). Section 5.06 of the Credit Agreement is
hereby amended by (1) deleting “and” at the end of clause (q), (2) changing clause (r) to clause
(u), and (3) inserting the following new clauses (r), (s) and (t) in appropriate order:
(r) Monthly Budget. As soon as available and in any event not later than 25
days after the end of each calendar month, commencing April 1, 2009, a monthly budget for
the 12 months following such calendar month end setting forth the Borrower’s projections for
production volumes, revenues, expenses, taxes and budgeted capital expenditures during such
period;
(s) Monthly Cash Flow Statements. As soon as available and in any event not
later than 25 days after the end of each calendar month, commencing April 1, 2009, the
Borrower’s cash flow statement for the preceding month and the calendar year to date,
showing a comparison of the actual results to the monthly budget delivered pursuant to
clause (r) for such period;
(t) Entrada Report. As soon as available and in any event not later than 25
days after the end of each calendar month, a report, in form and substance satisfactory to
the Administrative Agent and certified by a Responsible Officer of the Borrower, detailing
any material changes occurring during the preceding month which affect any of the Entrada
Entities; and
(d) Section 7.01(d) (Cross-Default). Section 7.01(d) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
(d) Cross-Defaults. (i) The Borrower, any Guarantor or any of their
respective Subsidiaries shall fail to pay any principal of or premium or interest on
its Debt (other than the CIECO Debt) which is outstanding in a principal amount of
at least $5,000,000 individually or when aggregated with all such Debt of the
Borrower, any Guarantor or any of their respective Subsidiaries so in default (but
excluding Debt evidenced by the Notes) when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Debt; (ii) any other
event shall occur or condition shall exist under any agreement or instrument
relating to Debt (including, without limitation, any event of default or termination
event under any Interest Rate Agreement or Hydrocarbon Hedge Agreement but excluding
any event of default under the CIECO Loan Documents) which is outstanding in a
principal amount (or termination payment amount or similar amount) of at least
$5,000,000 individually or when aggregated with all such Debt of the Borrower, such
Guarantor or such Subsidiary so in default, and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or (iii) any
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Debt (other than the CIECO Debt) shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof; provided that for purposes of this
paragraph (d), the “principal amount” of the obligations in respect of Hedging
Contracts at any time shall be the aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Hedging Contracts were
terminated at such time;
(e) Section 7.01(e) (Insolvency). Section 7.01(e) of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(e) Insolvency.
(i) The Borrower, any Guarantor or any of their respective Subsidiaries (other
than any Entrada Entity) shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due;
(ii) The Borrower, any Guarantor or any of their respective Subsidiaries (other
than any Entrada Entity) shall (A) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (B) make a general assignment for
the benefit of its creditors, (C) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), (D) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up, liquidation or composition or readjustment of debts, (E) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Federal Bankruptcy Code,
or (F) take any corporate action for the purpose of effecting any of the foregoing;
or
(iii) A proceeding or case shall be commenced, without the application or
consent of the Borrower, any Guarantor or any of their respective Subsidiaries
(other than any Entrada Entity), as applicable, in any court of competent
jurisdiction, seeking (A) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (B) the appointment of
a trustee, receiver, custodian, liquidator or the like of the Borrower, any
Guarantor or any of their respective Subsidiaries (other than any Entrada Entity) of
all or any substantial part of its respective assets, (C) similar relief in respect
of the Borrower, any Guarantor or any of their respective Subsidiaries (other than
any Entrada Entity) under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 days, or (D) an order for relief against the
Borrower, any Guarantor or any of their respective Subsidiaries (other than any
Entrada Entity) shall be entered in an involuntary case under the Federal Bankruptcy
Code;
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(f) Section 7.01(f) (Judgments). Section 7.01(f) of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(f) Judgments. Any judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against (i) the Borrower, any Guarantor or any of their
respective Subsidiaries (other than any Entrada Entity) and either (A) enforcement
proceedings shall have been commenced by any creditor upon such judgment or order or
(B) there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect, or (ii) any Entrada Entity and such judgment or order allows
any party recourse to the Borrower, any Guarantor or any of their respective
Subsidiaries (other than the Entrada Entities) or their respective assets (other
than the Entrada Assets) in order to satisfy such judgment or to comply with such
order;
(g) Section 9.01 (Amendments, Etc.). Clause (b) of Section 9.01(a) of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:
(b) (i) increase the Borrowing Base, the Conforming Borrowing Base or the
Commitments of the Lenders or (ii) decrease the Monthly Borrowing Base Reduction
Amount,
Section 4. Representations and Warranties. Each of the Borrower and the Guarantor
represents and warrants that: (a) the representations and warranties contained in the Credit
Agreement and the representations and warranties contained in the other Loan Documents are true and
correct in all material respects on and as of the Effective Date as if made on as and as of such
date, except to the extent that any such representation or warranty expressly relates solely to an
earlier date, in which case such representation or warranty is true and correct in all material
respects as of such earlier date; (b) no Default has occurred and is continuing; (c) the execution,
delivery and performance of this Amendment are within the corporate power and authority of such
Person and have been duly authorized by appropriate corporate action and proceedings; (d) this
Amendment constitutes the legal, valid, and binding obligation of such Person enforceable in
accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the rights of creditors generally and general principles of
equity; (e) there are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity and enforceability of
this Amendment; (f) the Liens under the Security Instruments are valid and subsisting and secure
Borrower’s obligations under the Loan Documents; (g) as to the Borrower, it has made Investments in
the Entrada Entities in an aggregate amount equal to $63,089,455 as of the Effective Date; and (h)
as to the Guarantor, it has no defenses to the enforcement of its Guaranty.
Section 5. Conditions to Effectiveness. This Amendment shall become effective on the
Effective Date and enforceable against the parties hereto upon the occurrence of the following
conditions precedent:
(h) The Administrative Agent shall have received multiple original counterparts, as requested
by the Administrative Agent, of this Amendment duly and validly executed and
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delivered by duly authorized officers of the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders.
(i) No Default shall have occurred and be continuing as of the Effective Date.
(j) The representations and warranties in this Amendment shall be true and correct in all
material respects.
(k) The Borrower shall have paid all costs and expenses which have been invoiced and are
payable pursuant to Section 9.04 of the Credit Agreement.
Section 6. Acknowledgments and Agreements.
(l) The Borrower acknowledges that on the date hereof all Obligations are payable without
defense, offset, counterclaim or recoupment.
(m) The Administrative Agent, the Issuing Lender and the Lenders hereby expressly reserve all
of their rights, remedies, and claims under the Loan Documents. Nothing in this Amendment shall
constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of the Loan Documents,
(iii) any rights or remedies of the Administrative Agent, the Issuing Lender or any Lender with
respect to the Loan Documents, or (iv) the rights of the Administrative Agent, the Issuing Lender
or any Lender to collect the full amounts owing to them under the Loan Documents.
(n) Each of the Borrower, the Administrative Agent, the Issuing Lender and the Lenders does
hereby adopt, ratify, and confirm the Credit Agreement, as amended hereby, and acknowledges and
agrees that the Credit Agreement, as amended hereby, is and remains in full force and effect, and
the Borrower acknowledges and agrees that its liabilities and obligations under the Credit
Agreement, as amended hereby, are not impaired in any respect by this Amendment.
(o) From and after the Effective Date, all references to the Credit Agreement and the Loan
Documents shall mean such Credit Agreement and such Loan Documents as amended by this Amendment.
(p) This Amendment is a Loan Document for the purposes of the provisions of the other Loan
Documents. Without limiting the foregoing, any breach of representations, warranties, and
covenants under this Amendment shall be a Default or Event of Default, as applicable, under the
Credit Agreement.
Section 7. Reaffirmation of Guaranty. The Guarantor hereby ratifies, confirms,
acknowledges and agrees that its obligations under its Guaranty are in full force and effect and
that the Guarantor continues to unconditionally and irrevocably guarantee the full and punctual
payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of
the Guaranteed Obligations, as such Guaranteed Obligations may have been amended by this Amendment,
and its execution and delivery of this Amendment does not indicate or establish an approval or
consent
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requirement by the Guarantor in connection with the execution and delivery of amendments, consents
or waivers to the Credit Agreement or any of the other Loan Documents.
Section 8. Counterparts. This Amendment may be signed in any number of counterparts,
each of which shall be an original and all of which, taken together, constitute a single
instrument. This Amendment may be executed by facsimile signature and all such signatures shall be
effective as originals.
Section 9. Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns permitted pursuant to
the Credit Agreement.
Section 10. Invalidity. In the event that any one or more of the provisions contained
in this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision of this
Amendment.
Section 11. Governing Law. This Amendment shall be deemed to be a contract made under
and shall be governed by and construed in accordance with the laws of the State of Texas.
Section 12. RELEASE. THE BORROWER ACKNOWLEDGES THAT ON THE DATE HEREOF ALL
OBLIGATIONS ARE PAYABLE WITHOUT DEFENSE, OFFSET, COUNTERCLAIM OR RECOUPMENT. IN ADDITION, EACH OF
THE BORROWER, THE GUARANTOR AND EACH OF THEIR RESPECTIVE SUBSIDIARIES (FOR THEMSELVES AND THEIR
RESPECTIVE SUCCESSORS, AGENTS, ASSIGNS, TRANSFEREES, OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS,
ATTORNEYS AND AGENTS) HEREBY RELEASES ANY AND ALL CLAIMS, CAUSES OF ACTION OR OTHER DISPUTES IT MAY
HAVE AGAINST THE ADMINISTRATIVE AGENT, ANY OF THE LENDERS, LEGAL COUNSEL TO THE ADMINISTRATIVE
AGENT OR ANY OF THE LENDERS, CONSULTANTS HIRED BY ANY OF THE FOREGOING, OR ANY OF THEIR RESPECTIVE
AFFILIATES, SUBSIDIARIES, SHAREHOLDERS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES,
SUCCESSORS OR ASSIGNS OF ANY KIND OR NATURE ARISING OUT OF, RELATED TO, OR IN ANY WAY CONNECTED
WITH, THE CREDIT AGREEMENT OR THE LOAN DOCUMENTS, IN EACH CASE WHICH MAY HAVE ARISEN ON OR BEFORE
THE DATE OF THIS AMENDMENT. EACH OF THE BORROWER, THE GUARANTOR AND THEIR RESPECTIVE SUBSIDIARIES
HEREBY ACKNOWLEDGES THAT IT HAS READ THIS AMENDMENT AND HAS CONFERRED WITH ITS COUNSEL AND ADVISORS
REGARDING ITS CONTENT, INCLUDING THIS SECTION 12, AND IS FREELY AND VOLUNTARILY ENTERING INTO THIS
AMENDMENT, AND HEREBY AGREES TO WAIVE ANY CLAIM THAT THE TERMS OF THIS AMENDMENT (INCLUDING,
WITHOUT LIMITATION, THE RELEASES CONTAINED HEREIN) ARE INVALID OR OTHERWISE UNENFORCEABLE.
Section 13. Entire Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS
AMENDMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES
11
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR
ORAL, WITH RESPECT THERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
12
EXECUTED effective as of the date first above written.
| BORROWER: | /s/ XXXXXX PETROLEUM COMPANY, a Delaware corporation |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| GUARANTOR: | /s/ XXXXXX PETROLEUM OPERATING COMPANY, a Delaware corporation |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Amendment No. 1 and Agreement
| ADMINISTRATIVE AGENT/ ISSUING LENDER: |
/s/ UNION BANK OF CALIFORNIA, N.A., as Administrative Agent and Issuing Lender |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Amendment No. 1 and Agreement
| LENDERS: | /s/ UNION BANK OF CALIFORNIA, N.A., as a Lender |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Amendment No. 1 and Agreement
