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EXHIBIT 99.4
EXECUTION COPY
FIRST AMENDMENT AND WAIVER, dated as of November 25, 1997 (this "First
Amendment"), to (i) the CREDIT AGREEMENT, dated as of September 23, 1997 (the
"Credit Agreement"), among BELCO OIL & GAS CORP., a Nevada corporation (the
"Borrower"), the several banks, financial institutions and other entities from
time to time parties to the Credit Agreement (the "Lenders") and THE CHASE
MANHATTAN BANK, as administrative agent (in such capacity, the "Administrative
Agent"), and (ii) the PLEDGE AGREEMENT, dated as of September 23, 1997, made by
the Borrower and the other Pledgors (as defined in the Credit Agreement) in
favor of the Administrative Agent for the ratable benefit of the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the Coda Acquisition Agreement (as defined below), the
Borrower has agreed to enter into the Coda Acquisition (as defined below);
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders enter into this First Amendment in connection with the consummation of
the Coda Acquisition; and
WHEREAS, the parties hereto wish to amend and waive certain provisions of
the Credit Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement shall be used as so defined.
2. Amendments and Waiver to the Credit Agreement and the Pledge Agreement.
(a) Subsection 1.1. (i) Subsection 1.1 of the Credit Agreement is hereby
amended to add the following definitions in their appropriate alphabetical
order:
"'Acquisition Effective Date': the date upon which the Coda Acquisition
shall have been consummated.
'Amendment Effective Date': the date on which each of the conditions
precedent set forth in Section 3 of the First Amendment shall be satisfied.
'Coda': Coda Energy, Inc., a Delaware corporation.
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'Coda Acquisition': the acquisition of all of the outstanding Capital
Stock of Coda by the Borrower.
'Coda Acquisition Agreement': the Agreement and Plan of Merger, dated
as of October 31, 1997, by and among the Borrower, Belco Acquisition Sub,
Inc. and Coda.
'Coda Indenture': that certain Indenture, dated as of March 18, 1996,
among Coda, as issuer, its Subsidiaries, as subsidiary guarantors, and
Texas Commerce Bank National Association, as trustee, relating to the Coda
Notes.
'Coda Notes': as defined in subsection 8.2(k).
'First Amendment': the First Amendment and Waiver, dated as of November
25, 1997, to this Agreement and the Pledge Agreement."
(ii) Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definitions of "Borrowing Base," "Consolidated Interest Expense,"
"Consolidated Net Income" and "EBITDA" in their entireties and substituting in
lieu thereof the following in their appropriate alphabetical order:
"'Borrowing Base': at any time of determination, the amount then in
effect as determined in accordance with subsection 4.9; provided, however,
that (i) from and after the Closing Date until the Acquisition Effective
Date, the Borrowing Base shall be $50,000,000 and (ii) from and after the
Acquisition Effective Date until such time as the Borrowing Base is so
redetermined in accordance with subsection 4.9, the Borrowing Base shall be
$105,000,000.
'Consolidated Interest Expense': with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis for any period, the sum of
(i) gross interest expense (including all cash and accrued interest
expense) of the Borrower and its Restricted Subsidiaries for such period on
a consolidated basis, including to the extent included in interest expense
in accordance with GAAP (x) the amortization of debt discounts and (y) the
portion of any payments or accruals with respect to Capital Leases
allocable to interest expense and (ii) capitalized interest of the Borrower
and its Restricted Subsidiaries on a consolidated basis; provided that,
commencing with the fiscal quarter ending December 31, 1997 and for the two
fiscal quarters thereafter, such consolidated interest expense shall be
determined as if the Coda Acquisition had been consummated on the first day
of the four quarter period then ending.
'Consolidated Net Income': for any period, net income of the Borrower
and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP, minus non-cash gains resulting from the net change in
value of the Borrower's xxxx-to-market
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portfolio of price risk management activities for that period to the extent
such gains are included in the net income of the Borrower for such period;
provided that, commencing with the fiscal quarter ending December 31, 1997
and for the two fiscal quarters thereafter, such consolidated net income
shall be determined as if the Coda Acquisition had been consummated on the
first day of the four quarter period then ending.
'EBITDA': with respect to the Borrower, for any period, Consolidated
Net Income for that period, plus, to the extent deducted from revenues in
determining Consolidated Net Income for that period, (a) the aggregate
amount of Consolidated Interest Expense for that period, (b) the aggregate
amount of letter of credit fees paid during that period, (c) the aggregate
amount of income tax expense for that period, (d) all amounts attributable
to depreciation, depletion and amortization for that period, (e) all
non-cash extraordinary expenses during that period and (f) non-cash losses
or charges to net income resulting from the net change in value of the
Borrower's xxxx-to-market portfolio of price risk management activities for
that period, and minus, to the extent included in revenues in determining
Consolidated Net Income for that period, all non-cash extraordinary income
during that period, in each case determined in accordance with GAAP and
without duplication of amounts; provided that, commencing with the fiscal
quarter ending December 31, 1997 and for the two fiscal quarters
thereafter, such EBITDA shall be determined as if the Coda Acquisition had
been consummated on the first day of the four quarter period then ending."
(b) Subsection 4.9. Subsection 4.9(a) of the Credit Agreement is hereby
amended by deleting in its entirety the last sentence of such subsection and
substituting in lieu thereof the following: "During the period (i) from and
after the Closing Date until the Acquisition Effective Date, the amount of the
Borrowing Base shall be $50,000,000 and (ii) from and after the Acquisition
Effective Date until the first Re-determination Date, the amount of the
Borrowing Base shall be $105,000,000;"
(c) Subsection 7.9(a). From the Amendment Effective Date until the
earlier of (i) the occurrence and continuance of a Default or Event of Default
(other than a Default or Event of Default waived by this paragraph) and (ii) the
date which is 180 days after the Acquisition Effective Date, the Lenders hereby
waive any Default or Event of Default resulting from non-compliance with the
provisions of subsection 7.9(a) of the Credit Agreement to the extent (but only
to the extent) that the failure to so comply is due to the fact that Coda has
not pledged the Capital Stock of Electra Resources, Inc., a Texas corporation
("Electra"), and Diamond Energy Operating Company, an Oklahoma corporation
("Diamond"), to the Administrative Agent, for the ratable benefit of the
Lenders.
(d) Subsection 8.2. Subsection 8.2 of the Credit Agreement is hereby
amended by adding the following paragraph (k) at the end of such subsection and
changing the punctuation in such subsection accordingly:
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"(k) Up to $110,000,000 aggregate principal amount of 10 1/2% Senior
Subordinated Notes due 2006 of Coda (the "Coda Notes"); provided that
within 180 days after the Acquisition Effective Date, the Borrower will
consummate a transaction pursuant to which all of the outstanding Coda
Notes shall become, or be exchanged for, Subordinated Indebtedness (in an
aggregate principal amount not to exceed the aggregate principal amount of
the outstanding Coda Notes (after giving effect to any purchase pursuant to
subsection 8.9(c)) plus the amounts of premiums, prepayments, penalties and
other amounts required to be paid in connection therewith and the
reasonable and customary fees and expenses incurred in connection
therewith), which Subordinated Indebtedness complies with the provisions of
subsection 8.2(h) hereof."
(e) Subsection 8.3. Subsection 8.3 of the Credit Agreement is hereby
amended by deleting in its entirety clause (k) thereof and substituting in lieu
thereof the following:
"(k) Liens securing Indebtedness otherwise permitted by subsection 8.2
not to exceed $5,000,000 in aggregate amount at any time outstanding;
provided that no such Liens under this clause (k) shall encumber any
Capital Stock of any Restricted Subsidiary."
(f) Subsection 8.4. Subsection 8.4 of the Credit Agreement is hereby
amended by adding the following paragraph (e) at the end of such subsection and
changing the punctuation in such subsection accordingly:
"(e) the Guarantee Obligations of Coda's Subsidiaries under the Coda
Indenture; provided that, within 180 days after the Acquisition Effective
Date, such Guarantee Obligations (i) shall no longer be outstanding or (ii)
if outstanding, shall comply with the provisions of subsection 8.4(c)
hereof."
(g) Subsection 8.9. Subsection 8.9 of the Credit Agreement is hereby
amended by deleting such subsection in its entirety and substituting in lieu
thereof the following subsection:
"8.9 Limitation on Optional Payments and Modifications of Debt
Instruments, Other Material Agreements. (a) Make any payments, optional
payment or prepayment on or redemption, defeasance or purchase of any
Indebtedness (other than Indebtedness under this Agreement) or amend,
modify or change, or consent or agree to any amendment, modification or
change to any of the terms (including the subordination provisions) of the
Senior Subordinated Notes, the Coda Notes (or other Subordinated
Indebtedness issued in exchange therefor) or any Permitted Subordinated
Refinancing Debt; provided that as long as no Default or Event of Default
has occurred or is continuing or would exist after giving effect thereto,
the Borrower may redeem or repurchase Subordinated Indebtedness otherwise
permitted by this Agreement (i) with the net cash proceeds from an
incurrence of Permitted Subordinated Refinancing Debt and (ii) to the
extent that, after deducting the amount of the proposed redemption or
repurchase, pursuant to subsection 8.7(b)(iii), from the amount of
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Restricted Payments permitted by subsection 8.7(b), the Borrower would be
able to make an additional Restricted Payment at such time pursuant to
subsection 8.7(b).
(b) Designate any Indebtedness as "Designated Senior Debt" under the
Coda Indenture or the Senior Subordinated Indenture without the consent of
the Required Lenders.
(c) Notwithstanding the foregoing provisions of this subsection 8.9,
the Borrower and/or Coda may make the "Change of Control Offer" as defined
in Section 4.13 of the Coda Indenture and acquire any of the Coda Notes
tendered pursuant to the terms thereof; provided that if the aggregate
principal amount of Coda Notes so tendered exceeds $10,000,000, the
Borrower will give the Administrative Agent written notice thereof."
(h) Schedules. Schedules 5.1 and 5.15 attached to the Credit Agreement
are hereby deleted and the Schedules attached hereto as Schedules 5.1 and 5.15
to this First Amendment are inserted in lieu thereof. Schedule 1 to the Pledge
Agreement is hereby amended and restated as set forth in Schedule 1-P to this
First Amendment.
(i) Supplement to Pledge Agreement. The Borrower hereby ratifies and
confirms its respective obligations under the Pledge Agreement as amended by
this First Amendment. The Borrower hereby grants to the Administrative Agent,
for the ratable benefit of the Lenders, a first priority security interest in
the Collateral (as such term is defined in the Pledge Agreement, as supplemented
by this First Amendment).
3. Effective Date. This First Amendment shall become effective upon the
satisfaction of the following conditions precedent on or before November 26,
1997:
(a) Loan Documents. The Administrative Agent shall have received this
First Amendment, duly executed and delivered by a duly authorized officer
of each of the Borrower and the Supermajority Lenders, with a counterpart
for each Lender.
(b) Coda Acquisition. (i) The Administrative Agent shall have received,
with a copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of the Coda Acquisition Agreement, and such
other documents or instruments as may be reasonably requested by the
Administrative Agent, and all such documentation shall be in form and
substance satisfactory to the Lenders, (ii) no material term of the Coda
Acquisition Agreement shall have been amended, waived or otherwise modified
without the prior written consent of the Administrative Agent and (iii) the
Coda Acquisition shall have been (or shall contemporaneously be)
consummated for an aggregate purchase price of approximately $324,000,000
(including the assumption of the Coda Notes and the repayment of other
existing Indebtedness of Coda), in accordance with the Coda Acquisition
Agreement.
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(c) Termination of Existing Debt. The Borrower shall have paid in full
all existing Indebtedness of Coda, other than the Coda Notes and other
Indebtedness which is permitted by subsection 8.2 of the Credit Agreement,
after giving effect to the Coda Acquisition, and all Liens on assets of
Coda and its Subsidiaries securing any such repaid Indebtedness shall have
been released, in each case pursuant to documentation satisfactory to the
Administrative Agent, including, but not limited to, UCC-3 termination
statements.
(d) No Litigation. No litigation, inquiry, injunction or restraining
order shall be pending, entered or threatened (including any proposed
statute, rule or regulation) which, in the opinion of the Administrative
Agent, could reasonably be expected to have a Material Adverse Effect.
(e) Consents, Licenses and Approvals. The Administrative Agent shall
have received a certificate of a Responsible Officer of the Borrower
stating that there are no governmental and third party approvals necessary
in connection with the Coda Acquisition which have not been obtained and
provided to the Administrative Agent.
(f) No Adverse Information. The Lenders shall not have become aware of
any previously undisclosed materially adverse information with respect to
the Coda Acquisition or the business, assets, operations, condition
(financial or otherwise) or prospects of the Borrower and its Restricted
Subsidiaries, taken as a whole (after giving effect to the Coda
Acquisition).
(g) Lien Searches. The Administrative Agent shall have received the
results of recent searches by a Person satisfactory to the Administrative
Agent of the Uniform Commercial Code filings which may have been filed with
respect to personal property of Coda and each of its Subsidiaries in the
jurisdictions within the States of Texas and Oklahoma where their assets
are located, and the results of such searches shall reveal no Liens on any
assets of the Borrower or Coda and their respective Subsidiaries, except
for Liens permitted by subsection 8.2 of the Credit Agreement.
(h) Secretary/Officer's Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Secretary and of a Responsible Officer of the Borrower, dated the Amendment
Effective Date, substantially in the form of Exhibit A to this First
Amendment.
(i) Reserve Report. The Administrative Agent shall have received a
preliminary reserve report from a firm satisfactory to the Administrative
Agent and other reserve information with respect to the Oil and Gas
Properties of Coda and its Subsidiaries, all of which shall be satisfactory
in form and substance to the Administrative Agent.
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(j) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificate or certificates representing the shares of all the
outstanding Capital Stock of Coda upon the consummation of the Coda
Acquisition pledged pursuant to the Pledge Agreement, as amended by this
First Amendment, together with an undated stock power for such certificates
executed in blank by a duly authorized officer of the Pledgor of such
shares.
(k) Lender's Fees. The Lenders shall have received all fees, expenses
and other consideration required to be paid or delivered on or before the
Amendment Effective Date.
(l) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this First Amendment and the Coda Acquisition
Agreement shall be satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such other
documents, financial statements and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
4. Representations and Warranties. The Borrower represents and warrants
to each Lender that, as of the Amendment Effective Date (a) this First Amendment
constitutes the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing, (b)
the representations and warranties made by the Borrower and the other Loan
Parties in or pursuant to the Loan Documents (as amended on the date hereof) are
true and correct on and as of the date hereof (except to the extent that such
representations and warranties are expressly made only as of an earlier date, in
which case such representations and warranties shall have been true and correct
on and as of such earlier date) and (c) after giving effect to the amendments
and waiver contained herein, no Default or Event of Default has occurred and is
continuing on the date hereof.
5. Continuing Effect. Except as expressly amended hereby, the Credit
Agreement and the other Loan Documents shall continue to be and shall remain in
full force and effect in accordance with their terms. Except as expressly set
forth herein, this First Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders under the Credit Agreement or any Loan Document, and shall not
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document.
6. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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7. Counterparts. This First Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this First Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this First
Amendment.
8. Costs and Expenses. The Borrower shall pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the preparation, execution and delivery of this First Amendment, including the
reasonable fees and disbursements of counsel for the Administrative Agent with
respect hereto.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BELCO OIL & GAS CORP.
By:
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Title:
00
XXX XXXXX XXXXXXXXX BANK, as
Administrative Agent and as a Lender
By:
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Title:
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CHRISTIANIA BANK OG KREDITKASSE ASA
By:
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Name:
Title:
By:
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Name:
Title:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
Title:
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DEN NORSKE BANK ASA
By:
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Name:
Title:
By:
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Name:
Title:
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THE FUJI BANK, LIMITED
By:
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Name:
Title:
00
XXXXX XXXX XX XXXXXX
By:
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Name:
Title:
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THE SANWA BANK LIMITED
By:
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Name:
Title:
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SOCIETE GENERALE, SOUTHWEST AGENCY
By:
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Name:
Title:
