THIRD AMENDMENT TO INTERCREDITOR AGREEMENT
THIS THIRD AMENDMENT TO INTERCREDITOR AGREEMENT (herein called this
"Amendment") made as of the 22nd day of April, 1998 by and among Inland
Production Company, a Texas corporation, (herein called "Borrower"), Inland
Resources Inc., a Washington corporation (herein called "Parent"), and ING
(U.S.) Capital Corporation, as Agent (herein called "Agent Lender"), the
Banks signatory hereto ("Banks"), TCW Asset Management Company, a California
corporation ("Tamco"), as Agent (herein called "Agent Noteholder"), and Trust
Company of the West, a California trust company ("Trustco"), on behalf of the
Noteholders named below.
W I T N E S E T H:
WHEREAS, Borrower, Parent, Agent Lender, the Banks, Agent Noteholder and
Noteholders have entered into that certain Intercreditor Agreement dated as
of September 23, 1997, as amended by that certain First Amendment to
Intercreditor Agreement dated as of December 12, 1997 and that certain Second
Amendment to Intercreditor Agreement dated as of December 24, 1997 (as so
amended, the "Original Agreement"); and
WHEREAS, the parties hereto desire to amend the Original Agreement as
provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, the parties
hereto do hereby agree as follows:
1. OTHER DEFINED TERMS. Unless the context otherwise requires, the
following term when used in this Amendment shall have the meaning assigned to
it in this Section 1:
"PARIBAS FACILITY REPAYMENT DATE" means the date on which all of the
following have occurred (i) the Credit Agreement dated December 24, 1997
between Inland Refining and Banque Paribas has been terminated and all of
Inland Refining's obligations thereunder have been paid in full, (ii) all
liens encumbering property of Inland Refining in favor of Banque Paribas
have been released and (iii) all of the conditions set forth in Section 3.2
of the Third Amendment to the Bank Agreement and Section 3.2 of the Second
Amendment to the TCW Agreement are satisfied; provided, however, that if
all conditions set forth in clauses (i), (ii), and (iii) of this definition
are not satisfied on or before May 15, 1998, then the Paribas Facility
Repayment Date shall not occur.
2. AMENDMENTS TO ORIGINAL AGREEMENT.
(a) The following amendments to Section 1(a) of the Original Agreement
shall be effective on the Paribas Facility Repayment Date:
"'AFFILIATES' ANCF' means, with respect to any Calculation Quarter, the
remainder of:
(a) the sum of all revenues and receipts of Parent and any Subsidiary
of Parent (including Inland Refining but excluding Borrower and any
Subsidiary of Borrower) from any source or activity (excluding any funds
received by Parent or any of its Subsidiaries from Approved Sales or
Financings or from sales of equity of Parent or from advances under the
Production/Refining Credit Agreement) accounted for under GAAP during any
Calculation Quarter, beginning with the Calculation Quarter which starts
April 1, 1998
less,
(b) the sum of all expenses and expenditures of Parent and any
Subsidiary of Parent (including Inland Refining but excluding Borrower and
any Subsidiary of Borrower), which expenditures shall be approved by all
Banks and Noteholders in their sole discretion, accounted for under GAAP
during such Calculation Quarter (excluding any payments financed by funds
described in the parenthetical phrase contained in the immediately
preceding subparagraph (a) above) for:
(i) applicable federal, state, or local income, ad valorem, or
franchise or other taxes;
(ii) operating expenses;
(iii) capital expenditures;
(iv) general and administrative expenses; and
(v) amounts necessary for working capital purposes in the
ordinary course of business;
provided, however, that with respect to any Calculation Quarter for which
Affiliates' ANCF is less than zero, Affiliates' ANCF for such Calculation
Quarter shall be deemed to be zero and any such negative amount shall be
included in the calculation of Affiliate ANCF for the next Calculation
Quarter.
'ANCF' means the sum of Borrower's ANCF plus Affiliates' ANCF; provided,
however, that no particular item of revenue, receipt, expense, or expenditure
is intended to be accounted for more than one time in the calculation of
Borrower's ANCF and Affiliates' ANCF for any Calculation Quarter.
'BORROWER'S ANCF' means, with respect to any Calculation Quarter, the
remainder of:
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(a) the sum of (i) all revenues and receipts of Borrower and any
Subsidiary of Borrower from any source or activity (excluding any funds
received by Borrower from Approved Sales or Financings or by Borrower under
the TCW Agreement or from advances under the Bank Agreement or receipts
from sales of equity of Parent) accounted for under GAAP during any
Calculation Quarter (and specifically including, without limiting the
generality of the foregoing, receipts from Permitted Interest Rate Xxxxxx
and Permitted Commodity Xxxxxx), beginning with the Calculation Quarter
which starts April 1, 1998 and (ii) after the occurrence of two (2)
consecutive 100% Dedication Quarters, any of Borrower's Working Capital
which exceeds the minimum Working Capital required under the TCW Agreement
or under the Bank Agreement,
less,
(b) the sum of all expenses and expenditures of Borrower and any
Subsidiary of Borrower, net to the interest of Borrower and any Subsidiary
of Borrower, accounted for under GAAP during such Calculation Quarter
(excluding any payments financed by funds described in the parenthetical
phrase contained in the immediately preceding subparagraph (a) above) for:
(i) Direct Taxes on the Borrower's Properties;
(ii) ANCF XXX;
(iii) ANCF Transportation Costs;
(iv) ANCF Capital Expenditures;
(v) ANCF Overhead Costs; and
(vi) Delay rentals payable with respect to Borrower's
Properties."
'PRODUCTION/REFINING CREDIT AGREEMENT' means that certain Credit
Agreement to be entered into between Inland Refining, as borrower, and
Borrower, as lender, pursuant to which Borrower shall agree to provide
credit to Inland Refining; such Credit Agreement to be approved pursuant to
the Bank Agreement and the TCW Agreement, including without limitation the
subordination of any loans or advances pursuant to such Credit Agreement to
the Bank Indebtedness and the TCW Indebtedness."
(b) The definition of "Allowed Bank Indebtedness" in Section 1(a) of the
Original Agreement is hereby amended to read in its entirety as follows
without regard to the Paribas Facility Repayment Date:
"'ALLOWED BANK INDEBTEDNESS' means:
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(i) all principal indebtedness for loans made by, and letters of
credit issued by, the Banks under the Bank Documents, provided that if
loans made and letters of credit issued under the Bank Documents during any
applicable period set forth in the following table, when added to loans
outstanding and the undrawn amount of outstanding letters of credit, exceed
the amount set out opposite such period in the following table, then
(unless otherwise expressly agreed by Agent Noteholder) the amount of such
excess shall be excluded from Allowed Bank Indebtedness:
Period Amount
------ ------
Prior to January 1, 1998 $45,000,000
January 1, 1998 through December 31, 1998 $65,000,000
January 1, 1999 through March 31, 2000 $80,000,000
April 1, 2000 through June 30, 2000 $77,500,000
July 1, 2000 through September 30, 2000 $75,000,000
October 1, 2000 through December 31, 2000 $72,500,000
January 1, 2001 through March 31, 2001 $70,000,000
April 1, 2001 through June 30, 2001 $66,250,000
July 1, 2001 through September 30, 2001 $62,500,000
October 1, 2001 through December 31, 2001 $58,750,000
January 1, 2002 through March 31, 2002 $55,000,000
April 1, 2002 through June 30, 2002 $51,250,000
July 1, 2002 through September 30, 2002 $47,500,000
October 1, 2002 through December 31, 2002 $43,750,000
January 1, 2003 through March 31, 2003 $40,000,000
April 1, 2003 through June 30, 2003 $30,000,000
July 1, 2003 through September 30, 2003 $20,000,000
October 1, 2003 through December 31, 2003 $10,000,000;
it being expressly understood and agreed that (A) any conversion between
loans accruing interest based upon a prime or base rate of interest and
loans accruing interest based upon a eurodollar or interbank offered rate
or between loans with different eurodollar or interbank offered rate
interest periods, shall not be treated as a funding of a new loan,
(B) loans which constitute Allowed Bank Indebtedness and are outstanding on
the date of a decrease in the amount of Allowed Bank Indebtedness in the
foregoing table (as contrasted with a new funding after such date) shall
continue to be Allowed Bank Indebtedness, and (C) the obligation of the
Borrower to make reimbursement under a drawing of any letter of credit and
any loan for the purpose of reimbursing any Bank for any amount drawn upon
a letter of credit (to the extent the loan does not exceed such amount
drawn) shall not be treated as a funding of a new loan and shall continue
to be treated as Allowed Bank Indebtedness,
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and
(ii) all interest, fees, indemnifications, and expenses owing by
Borrower to any Bank under the Bank Documents, provided that there shall be
excluded from Allowed Bank Indebtedness any interest owing on any loans
which are themselves excluded from Allowed Bank Indebtedness under the
immediately preceding subsection (i) and any fees, indemnifications, and
expenses relating to any such excluded loans or excluded interest,
and
(iii) obligations and liabilities in respect of Permitted Interest
Rate Xxxxxx.
Any allowed claim in an Insolvency Proceeding of Borrower for any of the
foregoing Allowed Bank Indebtedness shall also constitute 'Allowed Bank
Indebtedness', but any disallowed claim in such a proceeding shall cease to
constitute 'Allowed Bank Indebtedness'."
(c) The reference in Section 2 of the Original Agreement (as contained
in line 4 of such Section 2) to "granted by Borrower to secure" is hereby
amended to read "granted by Borrower, Parent, or any Related Person to
secure".
3. CALCULATION OF ANCF. With regard to the foregoing amendments in
Section 2 of this Amendment, the definition of ANCF in effect prior to the
Paribas Facility Repayment Date will be used for purposes of calculating ANCF
for the two Calculation Quarters during the period from September 30, 1997 to
March 31, 1998.
4. SCHEDULED BANK PAYMENTS. Schedule 1 of the Original Agreement is
hereby amended to read as Schedule 1 attached hereto.
5. DEFAULT UNDER PRODUCTION/REFINING CREDIT AGREEMENT. If a Default or
Event of Default (as defined therein) occurs under the Production/Refining
Credit Agreement, the Banks and the Noteholder hereby agree that such a
Default or Event of Default shall not constitute and Event of Default under
the Bank Agreement or the TCW Agreement, unless the Banks and the Noteholder
hereafter specifically agree otherwise.
6. CONSENT TO AMENDMENTS TO CREDIT AGREEMENTS. Agent Noteholder,
Noteholders, and Trustco consent for the benefit of Agent Lender and the
Banks to the execution by Agent Lender and the Banks of that certain Third
Amendment to Credit Agreement among Agent Lender, the Banks, Borrower, and
Parent of even date herewith. Agent Lender and the Banks consent for the
benefit of Agent Noteholder, Noteholders, and Trustco to the execution by
Agent Noteholder and Trustco of that certain Second Amendment to
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Credit Agreement among Agent Noteholder, Trustco, Borrower, and Parent of
even date herewith.
7. COUNTERPARTS. This Amendment may be separately executed in any number
of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Agreement.
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
Borrower: INLAND PRODUCTION COMPANY, a Texas
corporation
By:
--------------------------------
Xxxx X. Xxxxxxxxxx
Chief Financial Officer
Parent: INLAND RESOURCES INC., a Washington
corporation
By:
--------------------------------
Xxxx X. Xxxxxxxxxx
Chief Financial Officer
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Agent Noteholder: TCW ASSET MANAGEMENT COMPANY, a
California corporation, as
Investment Manager under that certain
Agreement dated as of June 13, 1994,
between TCW Asset Management and
Xxxxxx Xxxxxxx Group, Inc.
By:
----------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
By:
----------------------------------
Xxxx XxxXxxxx
Senior Vice President
Noteholders: TRUST COMPANY OF THE WEST, a
California trust company, acting in
its capacity as sub-custodian for
Mellon Bank for the benefit of
Account No. CPFF873-3032
By:
----------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
By:
----------------------------------
Xxxx XxxXxxxx
Senior Vice President
Agent Lender: ING (U.S.) CAPITAL CORPORATION, in
its capacity as Agent
By:
----------------------------------
Xxxxxxxxxxx X. Xxxxxx
Banks: ING (U.S.) CAPITAL CORPORATION
By:
----------------------------------
Xxxxxxxxxxx X. Xxxxxx
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U.S. BANK NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Tile:
MEESPIERSON CAPITAL CORP.
By:
----------------------------------
Name:
Tile:
By:
----------------------------------
Name:
Tile:
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SCHEDULE 1
SCHEDULED BANK PAYMENTS
Month In Which Payment Amount
Date Occurs of Payment
------------- ----------
June 29, 1999 $5,777,778
Sept 29, 1999 $5,777,778
Dec 30, 1999 $5,777,778
Mar 30, 2000 $4,333,333
June 29, 2000 $4,333,333
Sept 28, 2000 $4,333,333
Dec 28, 2000 $4,333,333
Mar 29, 2001 $3,611,111
June 28, 2001 $3,611,111
Sept 27, 2001 $3,611,111
Dec 28, 2001 $3,611,111
Mar 28, 2002 $3,250,000
June 27, 2002 $3,250,000
Sept 27, 2002 $3,250,000
Dec 30, 2002 $3,250,000
Mar 28, 2003 $2,888,889
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