EXHIBIT 10.37
September 18, 2002
3TEC Energy Corporation
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxxx,
Vice President-Accounting
Re: Third Restated Credit Agreement among
3TEC Energy Corporation ("3TEC")
and Bank One, NA et al. (the "Credit Agreement")
Gentlemen:
You have requested an amendment to the Credit Agreement to extend the Maturity
Date thereof, amend the procedure for determining the Borrowing Base, increase
the Borrowing Base, change the Base Rate Margin and LIBOR Margins and change the
asset sales basket. Specifically, the Credit Agreement is amended in the
following respects:
(a) Section 1 of the Credit Agreement is hereby amended in the following
respects:
(i) The definition of "Base Rate Margin" is hereby deleted and the
following new definition substituted in lieu thereof:
"Base Rate Margin shall be:
(i) three-eighths of one percent (.375%) per annum whenever the
Borrowing Base Usage is equal to or greater than 90%; or
(ii) one-quarter of one percent (.25%) per annum whenever the
Borrowing Base Usage is equal to or greater than 66% but less than
90%; or
(iii) zero percent (0%) per annum whenever the Borrowing Base
Usage is less than 66%."
(ii) The definition of "LIBOR Margin" is hereby deleted and the
following new definition substituted in lieu thereof:
"LIBOR Margin shall be:
(i) two percent (2%) per annum whenever the Borrowing Base Usage
is equal to or greater than 90%;
(ii) one and three-quarters percent (1.75%) per annum whenever
the Borrowing Base Usage is equal to or greater than 66%, but less
than 90%;
(iii) one and one-half percent (1.50%) per annum whenever the
Borrowing Base Usage is less than 66%."
(iii) The definition of "Maturity Date" is hereby deleted and the
following new definition and substituted in lieu thereof:
"Maturity Date shall mean August 31, 2004."
(b) Section 7(b) of the Credit Agreement is hereby amended by deleting
therefrom in its entirety the fifth sentence from the end of said Section 7(b)
and substituting the following new sentence in lieu thereof:
"The redetermined Borrowing Base shall be then determined based upon
the weighted arithmetic average of the proposed amount submitted by
each Lender, excluding the highest and lowest Borrowing Base determined
among the individual Lenders."
(c) Section 13(a) is hereby amended by deleting Subsection (ii) therefrom
in its entirety and substituting the following in lieu thereof:
"(ii) sell, lease, transfer or otherwise dispose of, in any fiscal
year, any of their assets except for (A) sales, leases, transfers or other
dispositions made in the ordinary course of Borrowers' oil and gas
businesses, (B) sales, leases or transfers or other dispositions made by
Borrowers between Borrowing Base Determination Dates which do not exceed an
aggregate of ten percent (10%) of the then current Borrowing Base in net
proceeds, and (C) other sales, leases, transfer or other dispositions made
with the consent of Majority Lenders which are made pursuant to, and in
full compliance with, Section 12(r) hereof;"
As of the date of this letter amendment, the Borrowing Base shall be
$160,000,000 until redetermined pursuant to the provisions of Section 7(b) of
the Credit Agreement.
The Lenders hereby confirm that they have received notice that ENEX Resources
Corporation merged into 3TEC Energy Corporation effective January 31, 2002, and
3TEC/CRI Corporation merged into 3TEC Energy Corporation effective August 8,
2002.
Accordingly, the term "Borrowers" as used herein and in the Credit Agreement
shall hereafter mean only 3TEC Energy Corporation.
Except to the extent that its provisions are specifically amended, modified or
superseded by this and by prior amendments thereto, the representations,
warranties and affirmative and negative covenants of the Borrowers contained in
the Credit Agreement are incorporated herein by reference for all purposes as if
copied herein in full. The Borrowers hereby restate and reaffirm each and every
term and provision of the Credit Agreement, as amended, (except to the extent
such terms and provisions relate solely to an earlier date), including, without
limitation, all representations, warranties and affirmative and negative
covenants.
If the foregoing meets with your approval, please execute this letter at the
place indicated below and return an executed copy to the Agent. This Amendment
shall not be effective until it is executed by the Borrowers and by Majority
Lenders (as defined in the Credit Agreement).
Very truly yours,
BANK ONE, NA
Administrative Agent
(Main Office Chicago)
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
RLD/jat Director,Capital Markets
APPROVED THIS 30th DAY
OF SEPTEMBER, 2002
BORROWERS:
3TEC ENERGY CORPORATION
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: VP - Controller & Treasurer
LENDERS:
BANK ONE, NA
(Main Office Chicago)
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Director, Capital Markets
THE BANK OF NOVA SCOTIA
By: /s/ X.X. Xxxxx
Name: X.X. Xxxxx
Title: Agent
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Senior Vice President and Manager
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President
BMO XXXXXXX XXXXX FINANCING, INC.
as Syndication Agent and a Lender
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
CIBC, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Authorized Signatory
COMERICA BANK-TEXAS
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Sr. Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
