EXHIBIT 10.32
FOURTH AMENDMENT TO CREDIT AGREEMENT
FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment"), dated
as of March 20, 2000 but effective as of February 29, 2000 (the "Effective
Date") among Xxxxxx Oil Corporation, a corporation formed under the laws of the
State of Michigan (the "Borrower"), Xxxxxx Exploration Company (the "Parent"),
each of the lenders that is a signatory, or which becomes a signatory, to the
Credit Agreement referred to below (individually, together with its successors
and assigns, a "Lender" and collectively, the "Lenders") and Bank of Montreal, a
foreign bank formed under the laws of Canada in its individual capacity as a
Lender and as agent for Lenders under the Credit Agreement referred to below (in
its capacity as agent, together with its successors and assigns in such
capacity, the "Agent").
RECITALS
WHEREAS, the Borrower, the Parent, the Lenders and the Agent are
parties to that certain Credit Agreement, dated as of February 9, 1998, as
amended by that certain First Amendment to Credit Agreement, dated as of June
24, 1998, and as amended by that certain Second Amendment to Credit Agreement
dated as of April 14, 1999, and as amended by that certain Third Amendment to
Credit Agreement dated as of October 29, 1999 (as so amended, the "Credit
Agreement"); and
WHEREAS, the Borrower has advised the Lenders and the Agent that it
desires to amend certain provisions of the Credit Agreement, and the Borrower
has requested that the Lenders and the Agent agree to amend certain provisions
of the Credit Agreement; and
WHEREAS, the Lenders and the Agent have agreed to so amend certain
provisions of the Credit Agreement upon the terms and subject to the conditions
and limitations of this Third Amendment;
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein, the parties hereto hereby agrees as follows:
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein are used with the meanings ascribed thereto in the Credit
Agreement. The following capitalized terms shall have the following respective
meanings when used herein:
A. "Lending Relationship" shall refer to the Credit Agreement and the
other Loan Documents, including, without limitation, this Fourth Amendment,
together with any and all negotiations, discussions, acts, omissions, renewals,
extensions, and other agreements or events related to the Credit Agreement and
such other Loan Documents, the parties' obligations thereunder and the
transactions contemplated thereby, including, without limitation, any such
negotiations, discussions, acts, omissions,
renewals, extensions, other agreements or events that (a) occurred prior to the
date hereof, (b) may occur on the date hereof, or (c) occurred prior to the
execution of this Fourth Amendment and the instruments and documents executed
and delivered in connection herewith o r relating hereto.
B. "Supplemental Mortgages" shall mean, collectively, all those
mortgages and supplements to mortgages necessary to grant to the Agent for the
benefit of the Lenders a first priority perfected Lien on the Oil and Gas
Properties owned by the Parent, the Borrower or any Subsidiary including those
Oil and Gas Properties acquired by the Parent, the Borrower or any Subsidiary
after February 9, 1998, and including without limitation, those properties
listed on Schedule III hereto and those properties located in the State of
Montana, all such mortgages and supplements to mortgages to be delivered within
thirty (30) days of the dat e hereof in accordance with Section 7.
C. "Released Claims" shall mean any and all claims (including without
limitation any liabilities, damages, demands and causes of action arising
therefrom), whether (a) at law or in equity, (b) on the alleged commission of a
tort, (c) on the alleged breach (or anticipatory breach or repudiation) of any
contract, duty, or warranty (whether oral or written, express or implied), (d)
on the alleged violation of any statute, tariff, or regulation (whether
promulgated by the United States, any state thereof, any foreign state or
country, or any other governmental agency or entity, wherever located), or (e)
on any other factual, legal or equitable theory, including, without limitation,
any claim for damages of any type or nature, for injunctive or other relief, for
attorneys' fees, interest or any other liability whatsoever on any theory,
including without limitation any loss, cost or damage in connection with or
based upon "lender liability", unfair dealing, duress, coercion, control or
undue influence, extortion or commercial bribery, breach of an implied covenant
or duty of good faith and fair dealing, material misrepresentation or omission,
overreaching, unconscionability, conflict of interest, bad faith, malpractice,
disparate bargaining position, detrimental reliance, promissory estoppel,
estoppel by deed, waiver, laches, or any other equitable theory, equitable
subordination, breach of fiduciary duty or any other duty, or tortious
inducement to commit such breach, tortious interference with contract or
prospective business relations, negligent performance of contractual
obligations, or other theories of negligence, negligent or intentional
infliction of emotional distress, slander, libel, other defamation, fraudulent
transfer, conversion, trespass to (or clouding the title of) property, usury,
violations of the Racketeer Influenced and Corrupt Organizations Act, deceptive
trade practices, conspiracy, or any theory of liability as partners or joint
venturers, that any Releasing Party may have as of the date hereof against any
Released P arty with respect to the Lending Relationship.
D. "Released Party" shall mean each of the Agent, the Lenders and
their respective predecessors, successors, assigns, directors, officers,
partners, employees, agents, attorneys, principals and Affiliates and all other
Persons liable or who might be claimed to be liable on their behalf
(collectively, the "Released Parties").
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E. "Releasing Party" shall mean each of the Borrower and the
Guarantors and their respective predecessors, successors, assigns, directors,
officers, partners, employees, agents, attorneys, principals, Affiliates and all
other Persons who might have a claim against any Released Party (collectively,
the "Releasing Parties").
Section 2. Amendments to Credit Agreement. The Credit Agreement is
amended hereby as follows:
A. Section 1.02 is amended hereby:
(i) by inserting the reference "and the Fourth Amendment"
after the reference "Th ird Amend ment" in the definition of the term
"Agreement";
(ii) "by deleting the reference "January 1, 2001" in the
definition of the term "Final Maturity Date" and substituting the following
therefor "(i) Xxxxx 0, 0000,".
(xxx) by adding the following definitions where alphabetically
appropriate: "Fourth Amendment" shall mean the Fourth Amendment to Credit
Agreement dated as of March 20, 2000.
"Fourth Amendment Effective Date" shall mean the "Effective Date"
as such term is defined in the Fourth Amendment.
"Second Amendment" shall mean the Second Amendment to Credit
Agreement dated as of April 14, 1999.
"Third Amendment" shall mean the Third Amendment to Credit
Agreement dated as of October 29, 1999.
B. Section 2.07 of the Credit Agreement is amended hereby as follows:
(i) by deleting subsection (b)(i) in its entirety and
substituting therefor the following new subsection (b)(i):
"(i) The Borrower shall make prepayments as set forth below:
A. The Borrower shall prepay the Loans as follows:
(1) On or before February 29, 2000, after
application of any prepayments made pursuant to
subsection C. below, the amount of $1,500,000; and
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(2) On or before March 31, 2000, after application
of any prepayments made pursuant to subsection C. below
during such month, the amount of $1,000,000.
B. Upon any Transfer of Property that would be included in
the Borrowing Base, the Borrower shall prepay the Loans in an
amount equal to 100% of the net cash proceeds of any such
Transfer, and any net cash proceeds in excess of the value
attributable to such Property in the Borrowing Base determined by
the Agent in its sole discretion at the time of the Transfer
shall be credited against the prepayments required under
subsection 2.07(b)(i)(A);
C. Upon any Transfer of Property that would not be included
in the Borrowing Base, the Borrower shall prepay the Loans in an
amount equal to 100% of the net cash proceeds of any such
Transfer, which prepayments shall be credited against the
prepayments required under subsection 2.07(b)(i)(A);
D. The entire amount of any prepayment made pursuant to
this subsection shall be applied to reduce the Aggregate Maximum
Credit Amounts pro rata to each Lender based on its Percentage
Share."
C. Section 9.12 of the Credit Agreement is hereby deleted in its
entirety and the following is substituted therefor "Intentionally Omitted."
Section 3. Covenants.
A. Covenants of the Borrower and the Parent. The Borrower or the
Parent, as the case may be, covenants and agrees that during the period from the
Fourth Amendment Effective Date through and including April 15, 2000 (or, if
earlier, the date of the next redetermination of the Borrowing Base in
accordance with Section 2.08 (d) of the Credit Agreement as amended hereby):
(i) Every two weeks the Parent shall deliver cash budgets in
form and substance reasonably satisfactory to the Agent and cash flow statements
in form and substance reasonably satisfactory to the Agent with variance
analysis to budget (including accounts receivables and accounts payables
reporting) not later than the Friday following the last week to which such
budgets and statements relate.
(ii) The Borrower shall not spud any xxxxx or conduct any other
drilling operations (other than with respect to xxxxx identified on Schedule II
hereto and routine workovers normally expensed in accordance with past practice)
without the prior
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written consent of the Agent and the Lenders, and shall not, without the prior
written consent of the Agent and the Lenders, use any amounts to acquire
acreage, leases, seismic data, or for any drilling costs and expenses other than
to acquire, extend or renew the Leases identified on Schedule I hereto or to pay
the drilling costs or expenses identified on Schedule II hereto.
(iii) The Borrower shall use its best efforts to raise capital,
whether through debt, equity or consummation of asset sales to achieve Borrowing
Base compliance, provided that the Lenders shall not require proceeds raised
through debt or equity offerings to be used for debt prepayments.
(iv) The Borrower shall provide to the Agent from time to time
upon request by the Agent the certificate of a Responsible Officer of the
Borrower stating that, except as disclosed in a schedule thereto, the Borrower
has not received written notice that any mechanics' liens have been filed or
will be filed on the Mortgaged Properties; provided that mere receipt of an
invoice for services rendered shall not constitute written notice that a
mechanics' lien will be filed.
B. The Lenders and the Agent Covenants. Each of the Lenders and the
Agent, as the case may be, covenants and agrees that during the period from the
Fourth Amendment Effective Date through and including April 15, 2000 (or, if
earlier, the date of the next determination of the Borrowing Base in accordance
with Section 2.08(d) of the Credit Agreement as amended hereby):
(i) the Agent will release any Lien that it may have on assets of
the Borrower sold by the Borrower in one or more arms length transactions for
fair value by the Borrower in accordance with the terms of the Credit Agreement
as amended hereby, the net cash proceeds of which sales are paid to the Bank
pursuant to Section 2.07(b)(i) of the Credit Agreement as amended hereby.
Section 4. Conditions Precedent. This Fourth Amendment shall become
binding upon receipt by the Agent of the following documents and satisfaction of
the other conditions provided in this Section 4, each of which must be
satisfactory to the Agent in form and substance:
A. counterparts of this Amendment executed by the Borrower, the Agent
and the Lenders;
B. certificates of the Secretary or an Assistant Secretary of the
Borrower and the Parent setting forth for each of them (i) the resolutions of
its board of directors, as applicable, with respect to the authorization to
execute and deliver this Amendment and consummate the transactions contemplated
hereby; (ii) the Responsible Officer of such entity authorized to sign as the
case may be this Amendment, and the Consent and Acknowledgements referred to in
this Section 4, and (iii) the signature of such authorized Responsible Officer
of such entity;
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C. a Consent and Acknowledgement executed by each of the Guarantors;
D. an opinion of counsel to Borrower and Parent substantially in the
form attached hereto as Exhibit A;
E. payment to the Agent for the ratable benefit of the Lenders of all
accrued and unpaid Interest outstanding under the Credit Agreement and the
Notes;
F. payment of the fees and expenses of the Agent and Lenders; and
G. such other documents as the Agent may reasonably request.
Section 5. Representations and Warranties.
A. The Borrower hereby reaffirms that the representations and
warranties made by the Borrower and the Parent in the Credit Agreement were true
and correct when made and, except as to be described in writing to the Agent as
of the date hereof, are true and correct as though made on and as of the date
hereof, and further, the Borrower represents that,
(i) as of the date hereof, no Default or Material Adverse
Effect has occurred and is continuing except as previously disclosed to the
Agent in writing or as set forth in Schedule IV hereto;
(ii) neither the Borrower, the Parent nor any Subsidiary has
acquired any additional Oil and Gas Properties since October 29, 1999 except as
identified on S chedule III hereto; and
(iii) the execution, delivery and performance by the Borrower or
any Guarantor of this Fourth Amendment and the other Loan Documents and all
instruments and documents to be delivered by the Borrower or such Guarantor, to
the extent a party thereto, hereunder and thereunder and the creation of all
Liens provided for herein and therein: (a) are within the Borrower's or such
Guarantor's corporate power; (b) have been duly authorized by all necessary or
proper corporate action, including the consent of stockholders, members and/or
partners therein or thereof; (c) are not in contravention of any provision of
the Borrower's or such Guarantor's certificate of incorporation, bylaws or
similar organizational and/or governing documents; (d) will not violate (1) any
law or regulation or (2) any order or decree of any court or governmental
instrumentality; (e) will not conflict with or result in the breach or
termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Borrower or such Guarantor is a party or by which the
Borrower or such Guarantor or any of their respective property is bound; (f)
will not result in the creation or imposition of any Lien upon any of the
property of the Borrower or such Guarantor other than those in favor of the
Agent pursuant to the terms of this Fourth Amendment and the other Loan
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Documents to be delivered in connection herewith; and (g) do not require the
consent or approval of any governmental body, agency, authority or any other
Person that has not been duly obtained, made or complied with prior to the date
hereof. At or prior to the date hereof, each of the Fourth Amendment and the
other Loan Documents to be delivered in connection herewith shall have been duly
executed and delivered for the benefit of or on behalf of the Borrower or such
Guarantor, in each case to the extent a party thereto, and each shall then
constitute a legal, valid and binding obligation of the Borrower or such
Guarantor, enforceable against it in accordance with its terms.
B. Each of the Borrower and such Guarantor further represents and
warrants, for itself only that he or it (i) is executing this Fourth Amendment
after consultation with counsel of his or its own choosing, (ii) has read and
understands the release granted by Section 6 hereof, (iii) desires to execute
this Fourth Amendment and (iv) has the requisite authority to enter into and be
bound by this Fourth Amendment, including the release granted by Section 6
hereof.
Section 6. Release.
A. Each of the Releasing Parties desires and intends fully to
compromise, release and settle any and all of the Released Claims; and each of
the Releasing Parties hereby covenants, warrants and represents unto each of the
Released Parties that such Releasing Party does hereby FOREVER RELEASE, ACQUIT,
WAIVE AND DISCHARGE each of the Released Parties of and from the Released Claims
and each of the Releasing Parties hereby declares the same FOREVER RELEASED,
ACQUITTED, WAIVED, SETTLED AND DISCHARGED. This release is effective without
regard to whether (i) such Released Claims are known or unknown, (ii) damages
arising out of such Released Claims have yet accrued, (iii) such Released Claims
arose collaterally, directly, derivatively, or otherwise between the parties
hereto or (iv) an ordinary person in the same or similar circumstances would or
would not, through the exercise of due care, have discovered such claims by the
date of this Fourth Amendment. In connection with the foregoing release:
B. The Borrower and each Guarantor represents and warrants that it has
the full power and authority to perform the release granted in this Section 6
and that it has not in any manner made any assignment of any Released Claim to
any third party.
C. The release granted in this Section 6 will be effective upon
execution of this Fourth Amendment by all of the parties hereto.
D. Each party executing this Fourth Amendment understands and agrees
that the release granted in this Section 6 is a full, final and complete release
of the Released Claims and that such release may be pleaded as an absolute and
final bar to any or all suits which may hereafter be filed or prosecuted by any
one or more of the Releasing Parties or anyone claiming by, through or under any
one or more of the Releasing Parties in respect of any of the matters released
hereby, and that no recovery on
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account of the Released Claims may hereafter be had from any of the Released
Parties; and that the consideration given for such release is not an admission
of liability or fault on the part of any of the Released Parties (it being the
express intent of the parties hereto to obtain peace of mind and avoid the
expense and uncertainty of potential litigation), and that none of the Releasing
Parties or those claiming by, through or under any of them will ever claim that
it is.
E. The parties hereto acknowledge that the release granted by this
Section 6 does not have any effect with respect to relationships between the
Borrower and each Guarantor and the Lenders and the Agent other than in
connection with the Lending Relationship.
Section 7. Events of Default and Remedies.
A. The occurrence of the following event (regardless of the reason
therefor) shall constitute an "Event of Default" hereunder:
(i) The Borrower shall fail to deliver within thirty (30) days
after closing the Supplemental Mortgages and the other documents required under
Section 8.09 of the Credit Agreement (including, without limitation, the legal
opinion), granting to the Agent a first priority Lien interest (subject only to
Excepted Liens) on the Borrower's, the Parent's, or any Subsidiary's interest in
any additional Oil and Gas Property listed on Schedule III hereto.
B. The occurrence and continuation of an Event of Default hereunder
shall constitute an Event of Default under the Credit Agreement as amended
hereby.
Section 8. Payment of Fees and Expenses; Form of Payment.
A. The Borrower confirms its obligation to pay to the Agent for the
ratable benefit of the Lenders the Amendment Fee provided in the Third
Amendment, which Amendment Fee is in an amount equal to two percent (2%) on the
outstanding balance of the Loans as of April 15, 2000, payable on April 15,
2000.
B. The Borrower agrees, whether or not the transactions contemplated
hereby are consummated, to pay all reasonable expenses of the Agent and the
Lenders (including, without limitation, all reasonable fees and disbursements of
counsel and other outside consultants for the Agent and/or the Lenders) in
connection with the negotiation, investigation, preparation, execution and
delivery of, recording and filing of, preservation of rights under and
enforcement of this Amendment and the other Loan Documents to be delivered in
connection herewith.
C. All payments to be made by the Borrower under this Amendment shall
be made in Dollars, in immediately available funds, to the Agent at such account
as the Agent shall specify by notice in accordance with Section 4.01 of the
Credit Agreement.
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Section 9. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Credit Agreement or any
of the other Loan Documents, or (b) prejudice any right or rights that the
Lenders or the Agent may have at any time under or in connection with the Credit
Agreement as amended hereby or any of the other Loan Documents. Except as
expressly supplemented, amended or modified hereby, the terms and provisions of
the Credit Agreement or any other Loan Documents are and shall remain in full
force and effect. In the event of a conflict between this Fourth Amendment and
any of the foregoing documents, the terms of this Fourth Amendment shall be
controlling.
Section 10. Non-Reliance on Agent and Other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own decision to enter into this Fourth Amendment,
and that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Fourth Amendment or the Credit Agreement. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Fourth Amendment or any other Loan Document
or any other document referred to or provided for herein or therein or to
inspect the properties or books of the Borrower. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder and under the Credit Agreement, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of the
Borrower (or any of its Affiliates) which may come into the possession of the
Agent or any of its Affiliates. In this regard, each Lender acknowledges that
Weil, Gotshal & Xxxxxx LLP is acting in this transaction as special counsel to
the Agent only. Each Lender will consult with its own legal counsel to the
extent that it deems necessary in connection with this Fourth Amendment and the
matters contemplated herein.
Section 11. Governing Law. This Fourth Amendment and the rights and
obligations of the parties hereunder and under the Credit Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas
and the United States of America.
Section 12. Descriptive Headings, etc. The descriptive headings of the
several Sections of this Fourth Amendment are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
Section 13. Counterparts. This Fourth Amendment may be executed in any
number of counterparts and by different parties on separate counterparts and all
of such counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be executed as of the date first written above.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE (Section)26.02
THIS FOURTH AMENDMENT AND OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE
PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND 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 AGREEMENT BETWEEN THE PARTIES.
BORROWER: XXXXXX OIL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President
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PARENT: XXXXXX EXPLORATION COMPANY
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President
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LENDER AND AGENT: BANK OF MONTREAL
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
Director
S
